Investors demand Sebi's green light for NSE IPO in Delhi High Court plea

Investors led by the People Activism Forum urge Delhi HC to direct Sebi to approve NSE's IPO, alleging unjustified delays that hinder shareholder value and public market access

Investors led by the People Activism Forum have approached the Delhi High Court, requesting directives to the Securities and Exchange Board of India (Sebi) for approving the National Stock Exchange’s (NSE) IPO. The move follows Sebi’s refusal to grant a no-objection certificate (NOC) for the listing, according to a report by The Economic Times.

 

In an affidavit, the Forum claimed that despite NSE reapplying for an NOC on August 27, Sebi has not provided valid reasons for withholding approval even after three months, the report said.

 

Investors argue that existing shareholders of NSE are unable to unlock the value of their holdings. Additionally, the general public is losing the opportunity to invest in the country’s largest stock exchange. NSE shares, highly sought-after in the unlisted market, have surged from Rs 900 to Rs 1,800 this year, partly due to IPO expectations.

 

Key shareholders in NSE

NSE distributed four bonus shares for every share held in November 2024. Major stakeholders include:

 

>Life Insurance Corporation (LIC): 10.72 per cent

>Radhakishan Damani (D-Mart founder): 1.58 per cent

>Stock Holding Corporation & SBI Capital Markets: 4.4 per cent each

>State Bank of India: 3.23 per cent

>Aranda Investments (foreign investor): 5 per cent

Forum's legal efforts

The Forum initially filed a petition in May 2024. Sebi responded by requiring NSE to reapply for the NOC, which it did in August. However, Sebi has resisted the petition, questioning the Forum’s standing in the case and cautioning that a favourable ruling could set a precedent for third-party interventions. Sebi also cited unresolved issues from the co-location scam as a reason for withholding permission, the report said.

 

NSE stated it has complied with Sebi’s rules and repeatedly sought listing approval, submitting evidence of its correspondence dated May 14 and August 27. NSE initially filed for an IPO in 2016 but withdrew it in 2019 due to investigations into the co-location scam. Sebi closed the case in September 2024 due to insufficient evidence.

 

The High Court is set to hear the case on March 6, 2025. Investors hope for a resolution to expedite the IPO process and bring NSE under the stricter regulatory framework that applies to listed entities, the report said.