The National Stock Exchange (NSE) has made another attempt to secure a No Objection Certificate (NOC) from the Securities and Exchange Board of India (SEBI) to move forward with its long-awaited Initial Public Offering (IPO). According to insider sources, NSE has submitted a fresh application addressing SEBI’s previously raised concerns.

1. The Eight-Year Wait for IPO Approval
Despite filing its Draft Red Herring Prospectus (DRHP) in December 2016, NSE has yet to receive the regulatory green light for its IPO. Over the years, it has sent multiple requests for NOC, including in November 2019, twice in 2020, and most recently in August 2024. The latest appeal, dated March 28, 2025, underscores NSE’s commitment to resolving outstanding regulatory matters.

2. SEBI’s Concerns and NSE’s Response
In a response to NSE’s earlier request on February 28, SEBI outlined key concerns related to technology upgrades, key management personnel (KMP) salaries, ownership of clearing corporations, and ongoing legal issues linked to the co-location controversy. NSE, in its fresh application, has provided a detailed response to each issue raised.

3. Clearing Corporation Ownership Issue
One of SEBI’s primary concerns is NSE’s 100% ownership of NSE Clearing Ltd. (NCL). SEBI has emphasized the need for clearing corporations to operate independently from exchanges, especially with interoperability between exchanges now in place. NSE, however, has pointed out that its current structure complies with the regulatory framework and highlighted that other listed exchanges like BSE and MCX also own their clearing corporations. NSE also believes that if it diversifies ownership of NCL, it could reduce capital infusion requirements and strengthen its financial position.

4. Technology Upgrades and Operational Stability
In response to SEBI’s queries on technology, NSE has asserted that it has made significant advancements in its IT infrastructure over the past few years. The exchange noted that there have been no major technical failures in the last four years, demonstrating improved operational resilience. Furthermore, of the 82 recommendations provided by McKinsey in 2022, NSE has already implemented 65, with eight more in progress and nine deemed unnecessary by its expert panel.

Strengthening of Workforce and Compliance Measures
SEBI had also raised concerns regarding staffing levels, particularly for critical operations. NSE has now reported a significant workforce expansion, increasing from 1,115 employees in FY23 to 1,673 in FY25. The number of staff in critical operational roles has nearly doubled, while compliance, risk management, and investor grievance divisions have also seen a sharp increase in personnel.

5. Addressing Legal Issues Through Settlements
On the legal front, NSE has reiterated its intent to resolve all pending regulatory and legal matters amicably. The governing board has already reaffirmed its willingness to settle outstanding issues and had even sent a formal request to SEBI in August 2024 to explore a resolution mechanism for pending cases across judicial forums.

6. Future Outlook for NSE’s IPO
With all concerns now addressed, NSE hopes for a favorable decision from SEBI, which could finally pave the way for its IPO. This long-awaited listing is expected to unlock significant value for investors and strengthen NSE’s position in the financial markets. Investors keen on NSE’s growth story will closely watch SEBI’s response in the coming weeks.