NSE Moves Closer to IPO as Plans to Appoint Merchant Bankers Progress

The National Stock Exchange (NSE) is advancing preparations for its anticipated initial public offering (IPO), with plans to appoint merchant bankers in March, as per The Economic Times report.

The move represents another step in a listing process that has faced delays for several years due to regulatory and governance issues. 

With advisory structures now in place and regulatory signals becoming clearer, the exchange is working towards initiating the formal stages of its IPO.

Appointment of Merchant Bankers for IPO

NSE is expected to select merchant bankers to manage its proposed IPO, marking an important stage in the listing process. These financial institutions will assist with preparing the necessary documentation, coordinating regulatory filings and managing the overall share offering.

Once appointed, the bankers will begin working on draft filings and interact with the Securities and Exchange Board of India (SEBI) to obtain approvals required for the public issue.

Advisory Support for the Listing Process

To guide the listing process, NSE has already appointed Rothschild & Co. as an independent adviser. The advisory firm is currently involved in selecting lead bankers, legal advisers and other intermediaries who will participate in structuring and executing the IPO.

The exchange has also formed a committee dedicated to supervising the progress of the listing plan.

Structure and Expected Size of the IPO

The proposed IPO is expected to take the form of an offer for sale (OFS), where existing shareholders will sell a portion of their holdings. Early indications suggest that approximately 4% to 4.5% of the exchange’s equity could be offered to public investors.

Based on pricing levels observed in the unlisted market, the offering could raise around $2.5 billion, equivalent to roughly ₹22,700 crore.

A Long-Delayed Listing Journey

NSE’s plan to go public has been under discussion for nearly a decade. The exchange initially filed its IPO application with SEBI in October 2016, but regulatory approval was not granted at the time.

The delay was largely linked to governance concerns related to the co-location case, where certain brokers were alleged to have gained preferential access to trading servers. The controversy raised questions about technological governance and internal oversight within the exchange.

Regulatory Developments Revive Momentum

Progress towards the IPO resumed after renewed regulatory review of the proposal. Following the appointment of a new SEBI chairman in 2025, the regulator established an internal committee to examine unresolved issues surrounding NSE’s listing.

The review process concluded earlier this year when the exchange received a no-objection certificate, indicating that regulators were open to the IPO moving forward in principle.

NSE’s Position in India’s Capital Markets

NSE plays a central role in India’s financial market infrastructure. It is the country’s largest stock exchange and operates one of the most active derivatives markets globally in terms of contract volumes.

Together with the Bombay Stock Exchange (BSE), it forms a dominant structure in India’s exchange landscape. The sector typically has high barriers to entry due to technological requirements, regulatory standards and the need for deep trading liquidity.

Large Shareholder Base Awaiting Exit

Another distinctive aspect of NSE is its wide shareholder base. The exchange has nearly 1.78 lakh investors, making it one of India’s largest unlisted companies by number of shareholders.

Many of these investors have held shares for several years and are expected to view the IPO as an opportunity to partially or fully exit their holdings through public markets.

Legal advisers working on the offering are reportedly exploring mechanisms that can ensure a fair allocation process for the varied shareholder group.

Read More: Upcoming IPO: Sunil Gold India Files Draft Papers with SEBI for Public Issue.

Conclusion

The planned appointment of merchant bankers marks a renewed step in NSE’s journey towards becoming a publicly listed company. 

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