 "No NOC request from NSE for IPO, says Sebi; requests HC to dismiss plea")
The Securities and Exchange Board of India (Sebi) on Wednesday informed the Delhi High Court that the National Stock Exchange (NSE) has not submitted a fresh request for a no-objection certificate (NOC) for its listing.
In response to a writ petition seeking to expedite NSE’s initial public offering (IPO), Sebi clarified the delay lies with the NSE, not the regulator.
Sebi sent queries to the NSE, which were addressed by the exchange in May this year, during which the NSE didn’t “expressly request” the NOC for listing its shares.
In 2019, the regulator returned NSE’s draft red herring prospectus (DRHP), which was filed in December 2016. It was advised to make a fresh filing upon resolution of the investigation in the colocation matter.
In June 2022, NSE had sought Sebi’s approval for the listing.
A month later, Sebi responded with observations on issues around technology, governance, surveillance, and trading along with lapses as a first-level regulator, inspection, and off-site monitoring.
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NSE submitted its responses in November 2022, and in May this year.
The regulator also clarified that it has not set the condition for NSE to remain glitch-free for one year as reported in the media.
Sebi requested the court to dismiss the plea, arguing it is inappropriate to direct a statutory regulator on how to perform its duties and make decisions.
Additionally, Sebi also refused to disclose the information on its investigations stating that such information can adversely affect the market, competitive position, and benefit third parties.
It added that the petition by People Activism Forum was an ‘act of outsider to derail regulatory proceedings’.
In its latest earnings call for the June quarter, the NSE’s managing director and chief executive officer Ashishkumar Chauhan told analysts that there was no clarity on its IPO.
In a submission made in June, NSE urged the market regulator to revisit its stance of allowing it to go public.
The exchange said most of the litigation matters were on the verge of reaching its conclusion, which may not be a reflection of the governance and regulatory norms that it was subjected to at present.
It added that it has been compliant with all disclosure guidelines laid down by Sebi.
Experts suggested that NSE may have to file a fresh request for obtaining NOC with updated details on governance and financials.
Delhi HC may hear the writ petition in December this year.
The shares of NSE in the unlisted market are trading at Rs 6,200 apiece, nearly doubling from its levels a year ago, as per data on UnlistedZone. However, the prices have cooled down from Rs 6,500 levels it had touched in May.
The exchange had announced bonus issuance last quarter for which shareholder approval has been obtained but Sebi’s nod is still awaited.
For the June quarter, NSE reported 39 per cent year-on-year (Y-o-Y) growth in the consolidated profit to Rs 2,567 crore led by a 51 per cent surge in revenues from operations to Rs 4,510 crore.
Timeline
Dec 2016: NSE filed DRHP with Sebi for offer for sale, observations by Sebi kept on hold due to ongoing investigation in collocation matter
Feb 2019: Sebi returned NSE’s DRHP due to change in offer size, asked to refile upon resolution of colo matter
Nov 2019: NSE filed for NOC from Sebi to plan for DRHP as six month prohibition in colo matter had ended
July 2020: NSE again submitted application for NOC
Aug 2021: Sebi sought undertaking from NSE, directors on compliance
June 2022: NSE submitted application for approval for listing
July 2022: Sebi responded with issues around tech, governance, and other lapses
Nov 2022: NSE partially responded to the Sebi queries
May 2024: NSE updated status on Sebi queries, though, no fresh request of NOC for listing