NSE awaiting NoC from SEBI before filing draft prospectus for IPO

The National Stock Exchange of India (NSE) is waiting for ‘No Objection Certificate’ from its regulator SEBI (Securities & Exchange Board of India) before filing Draft Red Herring Prospectus (DRHP) for its Initial Public Offer (IPO), a senior official said here on Friday.

NSE Chief Business Development Officer Sriram Krishnan also said that the exchange aims to further strengthen its commodities segment with plans to roll out new contracts in the next few months.

“For the IPO, first we need to get NOC from our regulator. We made an application in August and now waiting for NOC. Once we get that, we will file Draft Red herring Prospectus (DRHP) with SEBI,” Krishnan said. Once the regulatory review is complete and there is no adverse observation from SEBI, the exchange will proceed with launching its IPO. NSE’s listing has been delayed due to several factors, including investigations into the exchange’s preferential treatment of certain entities.

He also said that the market capitalisation of NSE-listed companies could double in the next 10 years to $12-13 trillion from $5.5 trillion at present by riding on the thriving Indian economy. The exchange took 30 years to reach $5.5 trillion as it has about 3,100 companies listed at present.

“We took 30 years to $5.5 trillion, and we have about 3,100 companies on the platform. So very logically, if you just do an extension of this logic, then we should add another 3,000 (to reach the market capitalisation of $12-13 trillion). But in the next 10 years, it should happen because people think that India’s GDP will, anyway, get to $10 trillion,” Krishnan said here.

This growth will be supported by existing companies listed on the NSE, and addition of newer companies on the platform. “There are 100 plus unicorns, many of them are not listed yet, so they could all add to the market cap as and when they get listed,” he added.

NSE Clearing Ltd, the exchange’s clearing corporation, further enhances confidence with a substantial settlement guarantee fund of ₹10,500 crore. This robust fund serves as a safety net, providing comfort for foreign and domestic participants alike, given the inherent risk of billions of trades handled by the platform.

New commodity contracts

Talking about commodities, he said: “We have applied for new contracts. As soon as we get the approval, we will launch them.” As of now, commodity trading has negligible share in overall business of the exchange. However, with more than 20 crore registered investors on its exchange, it is hopeful of higher business from commodity segment.

According to Krishnan, focus would be non-agri commodities as there is a lot of certainty in launching these asset classes compared to agri commodities. These additional contracts would be selected from a wide array of SEBI-approved commodities. Moreover, about 240 members have set up already and live on NSE commodities. These included foreign portfolio investors, algo participants and active market makers.

“NSE is convinced that commodities are a very big thing which is about to happen in India. We did a lot of analysis on which contracts come out, and FPI feedback to us was that we should come out with contracts which are cash settled,” he said while adding that NSE’s commodities platform can become a stronghold for key products like crude oil and natural gas.