NSE Denies Seeking Finance Ministry Intervention Amid SEBI IPO Approval Delay

The National Stock Exchange of India (NSE) has strongly resisted reports claiming it asked the Ministry of Finance to step in and help sort out a regulatory roadblock with SEBI over its long-delayed IPO. This statement came after a news report earlier today said the NSE had asked the government for help when SEBI didn’t issue a ‘no objection certificate’ (NOC) for the listing.

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Background: A Delayed Public Offering

The NSE, India’s biggest stock exchange by trading volume, has been trying to go public since 2016. But it’s been a rocky ride. Thanks to legal and regulatory hurdles, the IPO process has repeatedly been delayed. The most recent application was filed in March 2025, following earlier attempts in November 2019, twice in 2020, and again in August 2024.

So what’s at stake? If the IPO finally gets the green light, major investors like LIC, SBI, Morgan Stanley, and Canada Pension Plan Investment Board could start cashing out part of their holdings. That's a big deal considering how long they’ve been in the game.

The Reuters Report and NSE’s Response

A Reuters article published on May 8, 2025, claimed the NSE had written to the Ministry of Finance requesting intervention after SEBI denied its most recent IPO application. The report cited unnamed sources who claimed the letter asked the ministry to facilitate discussions with SEBI to resolve “unjustified delays.”

However, NSE quickly issued a public statement disputing the claims. “NSE has not had any correspondence with the Government of India in the last 30 months relating to its IPO,” the exchange stated. It emphasised that all communications have been routed directly through proper regulatory channels.

SEBI’s Conditions and Concerns

SEBI, led by new Chairman Tuhin Kanta Pandey, has insisted that the NSE meet several preconditions before IPO approval can be granted. These include:

• Operating glitch-free for at least one year.
• Resolving leadership vacancies, including appointing a board chairman.
• Strengthening its corporate governance structures.
• Adhering strictly to internal regulatory standards for top management appointments.

The regulator’s insistence stems from past issues with the company, including a major trading outage in 2021 and the infamous and controversial “co-location” case, in which certain brokers allegedly gained unfair trading advantages through early access to NSE’s servers.

Exchange Pushes Back Against SEBI

Tensions are rising between NSE and SEBI. Behind closed doors, NSE has voiced growing frustration over what it sees as the regulator's overly strict treatment. The exchange says that delays in getting feedback and approvals from SEBI make meeting the standards SEBI expects nearly impossible. NSE also points out that it’s already made significant changes, like revamping its trading systems and tightening its internal governance, to meet those demands.

And there’s more. Sources close to the situation say NSE is concerned that SEBI seems to be treating its rival, the Bombay Stock Exchange (BSE), more favorably. If true, that adds another layer of complexity to NSE’s already bumpy road to an IPO.

Legal Battle Brewing

The IPO delay hasn’t just stayed in boardrooms and regulator meetings; it’s landed in court. In December 2024, a group of institutional and retail investors, working under the name “People Activism Forum,” filed a petition in the Delhi High Court. 

Their message to SEBI? Stop dragging your feet. The petition argues that after nearly a decade of waiting, investors deserve the chance to exit, and SEBI’s inaction stands in their way.

Investor Frustration Grows

Institutional investors have grown increasingly impatient, particularly those who entered with the expectation of a public listing within a few years. Some have attempted to exit via secondary sales in the unlisted market, often at lower valuations due to the persistent regulatory uncertainty.

Industry analysts warn that prolonged inaction may erode investor confidence in the NSE and India’s broader financial regulatory environment. “This is not just a listing delay, it’s a signal to the global investor community about how unpredictable India’s regulatory timeline can be,” said a Mumbai-based investment banker on condition of anonymity.

Outlook: No Immediate Resolution in Sight

Despite the NSE’s categorical denial of government outreach, the situation remains tense. SEBI has not issued a fresh timeline for IPO reconsideration, nor has the Ministry of Finance commented on the Reuters report or NSE’s rebuttal. With a court case pending and regulator-exchange relations under strain, the timeline for NSE’s listing remains uncertain.

Until a legal directive or a shift in SEBI’s stance, the IPO appears stuck in limbo, leaving investors, stakeholders, and the market in a prolonged wait.

Conclusion

The NSE's statement refuting involvement of the Finance Ministry may clarify its position publicly. Still, it does little to address the deeper regulatory and legal hurdles obstructing its IPO ambitions. As pressure mounts from investors and legal forums, all eyes now turn to SEBI, the judiciary, and whether a compromise or directive can break the deadlock.