NSE refutes claims of approaching the government over SEBI's delay in IPO approval.

On Thursday, the National Stock Exchange (NSE) denied allegations that it had sought help from the Ministry of Finance to secure regulatory approval for its long-delayed initial public offering (IPO).

In response to a media report suggesting the exchange had contacted the Centre amid a standoff with the Securities and Exchange Board of India (SEBI), NSE clarified there had been no communication with the Union government on the matter for the past 30 months. "The story is denied by NSE," the exchange stated on X. 

Report alleges NSE approached Finance Ministry for help
Earlier in the day, Reuters reported that the NSE had written to the Finance Ministry following a lack of progress on its March application for a ‘no objection certificate’ (NOC) from SEBI. Citing unnamed sources, the report stated that the letter requested the ministry to engage with SEBI’s new leadership to address the regulatory issues holding up the IPO.

Tensions rise in long-standing NSE-SEBI standoff
The reported development marks a rare escalation in the prolonged impasse between the National Stock Exchange (NSE), the country’s largest stock exchange, and its principal market regulator, the Securities and Exchange Board of India (SEBI).

IPO efforts have stalled since 2016
NSE, which operates the world’s largest derivatives platform, has been pursuing a public listing since 2016. However, its IPO ambitions have faced persistent regulatory delays due to unresolved legal issues and governance-related concerns, the report noted. In contrast, rival exchange BSE Ltd is already publicly traded.

A successful IPO would offer a long-awaited exit opportunity for major stakeholders, including the Life Insurance Corporation of India, State Bank of India, Morgan Stanley, and the Canada Pension Plan Investment Board.

Past government outreach acknowledged
While NSE has denied making any recent appeal to the government, sources cited by Reuters claimed the exchange had previously reached out for support, notably in November 2019, twice in 2020, and most recently in August 2024.

“The letter requests the Ministry of Finance to engage with SEBI’s newly appointed chairman to resolve the regulatory concerns delaying NSE’s public offering,” a source familiar with the communication told Reuters.

SEBI points to governance concerns
SEBI Chairman Tuhin Kanta Pandey recently stated that the regulator is actively addressing issues related to NSE’s IPO, but emphasized that protecting public interest takes precedence over commercial objectives.

According to Reuters, a source indicated that “various SEBI departments had raised concerns,” and until all divisions are satisfied that the issues have been resolved, a no-objection certificate (NOC) is unlikely to be granted.

Key among the concerns are governance lapses, including a delay in the appointment of a board chairman. In its letter to the Finance Ministry, NSE reportedly refuted these claims, attributing the delay to SEBI’s own inaction in approving a proposed candidate since 2022.

Claims of regulatory bias
The exchange also raised concerns over SEBI’s recent decisions, alleging a lack of regulatory neutrality. NSE argued that certain policy measures, such as changes to futures and options trading regulations and a proposal requiring exchanges to reduce their stakes in clearing corporations, have disproportionately affected it compared to rival BSE.

In its communication, NSE warned that such regulatory actions could lead to higher operational costs and may even pose risks to overall market stability.

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