NSE won't list its IPO on own platform: Here's why
What's the story
The National Stock Exchange (NSE) won't be listing its shares on its own platform for the upcoming initial public offering (IPO). NSE Managing Director and CEO Ashish Chauhan told ANI that Indian regulations prohibit exchanges from self-listing. He said, "It's a regulation of India, and we have to abide by that." This comes after Securities and Exchange Board of India (SEBI) gave the exchange a no-objection certificate for its long-pending IPO.
IPO details
NSE to seek listing on another exchange
Chauhan clarified that the NSE will seek listing on another recognized exchange, likely the Bombay Stock Exchange (BSE). He said it would take a few months to prepare and file its Draft Red Herring Prospectus (DRHP), which SEBI will review for further clearance. The proposed IPO will be an Offer for Sale (OFS), with no fresh capital being raised by the exchange.
Market response
Merchant bankers to guide on offer price
Chauhan said the exchange will invite existing shareholders to indicate if they want to sell shares as part of the IPO. "With that, we will go to SEBI, saying that these are the people wanting to sell their shares, and allow us to do an IPO," he explained. On market valuation estimates of around $50 billion, Chauhan said such numbers should be taken "with a pinch of salt."
Market strategy
IPO mainly procedural for existing shareholders' liquidity
Chauhan said merchant bankers appointed to the issue will advise the IPO committee on offer price, considering financial performance, industry comparables, growth trends, and broader economic factors. He emphasized that the IPO is mainly procedural to provide liquidity to existing shareholders rather than fund expansion. Although NSE shares may be traded across multiple platforms after listing (subject to regulatory approvals), listing itself enables broader participation and enhances liquidity for shareholders.
Governance impact
Public listing can enhance transparency, governance
Chauhan said public listing can strengthen transparency and governance. He cited Life Insurance Corporation (LIC) as an example of improved governance post-listing. He also stressed that NSE, a key public utility in India's financial system, should be listed in line with broader principles of accountability and openness. This comes as part of the SEBI no-objection certificate for NSE's IPO process after nearly a decade-long wait.
Market accessibility
India's capital market structure enables access to public capital
Chauhan also highlighted India's position as a cost-effective and inclusive capital market, particularly for small and medium enterprises (SMEs). He said in developed markets like the US, listing costs can be between $20 million and $30 million. However, in India, companies are raising smaller amounts with lower listing costs. Chauhan stressed that India's market structure enables companies of all sizes to access public capital without disproportionate costs.