NSE Urges SEBI To Reconsider IPO Approval In Delhi High Court Proceedings

The National Stock Exchange has asked the Securities and Exchange Board of India to reconsider its decision on allowing the country's largest bourse to go public. This request was submitted in an affidavit before the Delhi High Court, in response to a case filed by the People Activism Forum seeking to expedite NSE's IPO.

The affidavit, as seen by NDTV Profit, said that SEBI, in a letter dated Nov. 21, 2016, approved the listing of equity shares on a recognised stock exchange, contingent upon compliance with applicable regulations and SEBI circulars. The offer received approval from NSE's Board of Directors and shareholders through resolutions passed on Oct. 4, 2016, and Nov. 10, 2016, respectively.

During that period, NSE, its directors, and its group companies were not barred from accessing or operating in capital markets by SEBI or any other authorities.

However, in a 2019 order, SEBI barred NSE from accessing the securities market for six months due to complaints related to its co-location facilities. Although the Securities Appellate Tribunal modified financial penalties in January 2023, it upheld the market access restriction.

The petition copy, also seen by NDTV Profit, mentions that NSE's 2022-2023 annual report emphasised that the six-month prohibition period had ended and that it awaited SEBI's further approval for listing. News articles in December 2023 suggested SEBI had imposed additional conditions for NSE's IPO approval, including maintaining a glitch-free year, enhancing technological infrastructure, improving corporate governance, and resolving pending legal matters.

On Jan. 2, the People Activism Forum submitted a representation to the Ministry of Finance, urging an inquiry with SEBI to establish a timeline for NSE's public listing. Despite subsequent follow-ups, including an RTI application seeking specific information on SEBI's conditions, the forum has received inadequate responses.

The forum has submitted in its petition that even if NSE is not allowed to issue fresh equity shares, existing shares should be listed to avoid any prejudice to stakeholders. The writ petition seeks judicial intervention to facilitate NSE's public listing, citing the lack of substantial objections from SEBI.

The case will come up for further hearing on Aug. 14.

The People Activism Forum is being represented by Advocate Rohan Thawani.