Roy National Stock Exchange (NSE) has officially reacted to a letter of the Securities and Exchange Board of India (SEBI) which expressed reservations in issuing a No Objection Certificate (NOC) for the proposed Initial Public Offering (IPO) by the exchange, sources have discovered.
In its reply, NSE responded to the concerns raised by the regulator and reiterated its support for regulatory compliance. The exchange argued that it is ready to divest its holding in its clearing corporation, a primary requirement SEBI has underlined, but said it is looking forward to increased regulatory clarity in this regard. NSE said that after receiving the due guidance, it will go ahead with the divestment and undertake any necessary processes in a time-bound manner.
NSE has done so in August 2024 with a revised application, with hopes of expediting its long-delayed IPO plans. Regulatory concerns about the structure of the exchange’s business and its holding in its clearing subsidiary have seen the process being delayed further. SEBI’s latest letter highlighted certain gaps and issues that need to be plugged for the NOC to be granted.
Sources close to the issue report that NSE, in its most recent communication, asked SEBI to lay down a clear regulatory framework, and that the uncertainty has frozen action. The exchange is keen to clear the issues and get the NOC at the earliest, which would enable it to file its draft red herring prospectus and get closer to listing.
The progress is closely monitored by investors and market players as NSE dominates India’s capital markets and there are high expectations for its IPO. The resolution of this regulatory tug-of-war will be instrumental in setting the future timing of one of the nation’s most highly awaited public offerings.
