Sebi NOC for NSE's Street Plan Likely Within a Month

Sebi may press for disclosures in IPO papers, or agree to out-of-court settlement

- Ram Sahgal & Neha Joshi

A long-standing impasse between India's largest stock exchange and the market regulator regarding the exchange's public listing appears to be nearing a resolution. The possibility of such a breakthrough has lifted investors' mood, and sent unlisted shares of the exchange soaring in the grey market.

According to two people aware of ongoing discussions, the National Stock Exchange (NSE) may receive a no-objection certificate (NOC) from the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO) within weeks, potentially ending years of litigation and regulatory deadlock.

Two options are being discussed, the two people cited above said on the condition of anonymity.

One: Sebi granting the NOC subject to additional disclosures in NSE's draft red herring prospectus (DRHP) about the pending court cases.

Two: an out-of-court settlement, under which NSE would agree to pay a fee in exchange for Sebi withdrawing the cases.

"Both options are on the table," the first person cited above said, adding that in case the first option is taken it will require additional disclosures in IPO papers.

"This is standard practice in capital markets—investors are informed, and the risk is theirs to evaluate."

The second person added that discussions are also under way on a potential settlement fee amount for Sebi to withdraw the cases, especially those pertaining to the so-called "dark fibre" matter.