NSE to list, finally

To file draft prospectus for domestic listing by Jan, for foreign listing by April

The board of directors of the National Stock Exchange of India (NSE) has given the requisite nod for listing the exchange’s shares in India and abroad. The decision was taken last Thursday and comes amid increasing pressure from the exchange’s shareholders, keen on a public listing.

The exchange will file its draft prospectus with the Securities and Exchange Board of India (Sebi) by January 2017, after getting shareholders’ nod, addressing restructuring needs of the exchange and the regulatory requirements for listing, NSE said in a note on Monday.

The board has advised the management to file for listing abroad by April 2017. Business Standard had first reported that the exchange was mulling a foreign listing, in addition to doing so in India, after the issue was discussed at the exchange’s board meeting on February 8.

“Further, to accelerate the listing procedures, the board has re-constituted the current listing committee, as an empowered sub-committee of the board. The said committee will take decisions within a stipulated time line,” the note said. The panel had been formed in February, to accelerate the process of going public and engage with shareholders on the issue.

Shares of State Bank of India, IDBI Bank and IFCI, all of which hold shares in NSE, rose 2.7 per cent, 2.3 per cent and 5.9 per cent, respectively, on the BSE. The benchmark Sensex on Monday rose only 0.02 per cent.

The NSE note, however, made no mention of whether the exchange was now okay with cross-listing its shares on rival stock exchange BSE. It had for long been lobbying for self-listing but the request was turned down by Sebi, saying the regulations did not allow this. NSE had argued that self-listing was a common practice internationally and there could be fresh demarcation of the exchange’s regulatory functions.

THE PATH TO GOING PUBLIC

• Jan 1,’16: Sebi issues notification changing the Stock Exchanges and Clearing Corporations Regulations, making it easier for exchanges to list
• Feb: NSE lobbies for self-listing
• Feb: Exchange board discusses foreign listing in addition to listing in India
• Feb: NSE forms listing committee to accelerate process of going public
• Feb: NSE says okay with listing on rival BSE if all mandatory disclosures are allowed to be directly sent to either Sebi or another regulatory body
• May: In response to a letter from NSE, Sebi clarifies that the present regulatory framework does not allow self-listing
• Jun 23: NSE board approves listing

“If you look at the global benchmarks, virtually every exchange that has gone down the path has chosen self-listing. Therefore, to go ahead and not list on the NSE is not a good solution,” Ravi Narain, vice-chairman, NSE, told Business Standard months earlier.

The exchange later said it was fine with listing on the BSE if all mandatory disclosures were directly sent to either Sebi or another regulatory body.

In January, Sebi had issued a notification amending the Stock Exchanges and Clearing Corporations Regulations, making it easier for exchanges to list.

BSE has already appointed a lead merchant banker for its Initial Public Offer and plans to file its draft prospectus by July. It aims to raise between Rs 400 crore and Rs 1,200 crore from the equity offering.