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NEW DELHI: The National Stock Exchange of India filed its Draft Red Herring Prospectus with the Securities and Exchange Board of India on Wednesday night, June 17 2026, formally initiating a public listing process that the exchange first attempted in December 2016 before a decade of regulatory and legal complications brought it to a halt. The offering is structured as a book-built public issue consisting entirely of an offer for sale of up to 148,905,525 equity shares with a face value of Re 1 each representing approximately 6.02 percent of the exchange’s post-offer paid-up equity capital of 247.50 crore shares. Because there is no fresh issue component, the exchange itself will receive no proceeds. All capital, net of transaction costs and taxes will accrue to the divesting shareholders.
The Deal Structure and Timeline
Capital market bankers estimate the total IPO size at approximately Rs 30,000 crore based on prevailing unlisted grey market prices. This is a provisional projection and does not represent a confirmed offer price. Under SEBI’s SECC Regulations, a stock exchange cannot list on its own platform. NSE has accordingly proposed listing its shares exclusively on BSE, subject to necessary approvals.
SEBI issued a formal No Objection Certificate to NSE on January 30 2026 clearing the regulatory path for the DRHP filing. SEBI now enters a review period that typically runs between 30 and 90 days. Following resolution of regulatory queries, NSE will file its final Red Herring Prospectus with the Registrar of Companies, establish a price band and open the bidding window. Bankers anticipate a public listing within late 2026.
Twenty domestic and international investment banks have been appointed as Book Running Lead Managers. The syndicate includes Kotak Mahindra Capital, JM Financial, Morgan Stanley India, Citigroup Global Markets India, HSBC Securities, JP Morgan India, SBI Capital Markets, Axis Capital, Avendus Capital, ICICI Securities, HDFC Bank, IIFL Capital Services, Motilal Oswal Investment Advisors, Nuvama Wealth Management, DAM Capital Advisors, Equirus Capital, IDBI Capital Markets, Anand Rathi Advisors, Pantomath Capital Advisors and 360 ONE WAM.
The offering’s allocation is structured as follows: up to 50 percent for Qualified Institutional Buyers, not less than 15 percent for Non-Institutional Investors, not less than 35 percent for Retail Individual Bidders and an employee reservation of up to 5 percent of post-offer paid-up capital.
Who Is Selling and Who Is Not
The OFS involves 23 selling shareholders 19 corporate entities and four individuals. State Bank of India is the largest single seller, offloading up to 24,750,000 shares from its direct pre-IPO holding of 3.23 percent. Its subsidiary SBI Capital Markets, which holds 4.33 percent is divesting an additional 5,362,000 shares, making the SBI group the combined largest seller.
Other significant sellers include Morgan Stanley’s MS Strategic Mauritius Limited with 16,000,000 shares, the Canada Pension Plan Investment Board with 11,874,060 shares, Temasek’s subsidiary Aranda Investments Mauritius with 11,246,336 shares, Stock Holding Corporation of India with 10,890,000 shares, Bank of Baroda with 10,986,250 shares, General Insurance Corporation with 10,658,000 shares and The New India Assurance Company with 10,500,000 shares. National Insurance Company and United India Insurance are each selling 6,000,000 shares.
Notable non-sellers include the Life Insurance Corporation of India, NSE’s largest single shareholder with a pre-IPO holding of 10.72 percent, which has elected to retain its entire stake. Azeem Premji’s PI Opportunities Fund-I, holding 2.35 percent and veteran retail investor Radhakishan Damani, holding 1.58 percent are also abstaining from the sale.
NSE’s Financial Performance
The DRHP’s financial disclosures show NSE’s total income for FY26 at Rs 187,133.70 million, down approximately 2.4 percent from Rs 191,768.31 million in FY25 but above Rs 163,520.62 million in FY24. Revenue from operations fell to Rs 166,013.09 million in FY26 from Rs 171,406.78 million in FY25. Net profit for FY26 reached Rs 103,020.61 million, down 15.47 percent from Rs 121,876.89 million in FY25.
The decline in profitability was driven primarily by a sharp rise in costs. Total expenses excluding contributions to the Core Settlement Guarantee Fund climbed 24.83 percent to Rs 59,999.03 million in FY26. The single largest contributor was a regulatory provision of Rs 1,391.21 crore recognised during the year to settle legacy investigations connected to the exchange’s co-location facility. This came on top of a Rs 100 crore deposit already placed with SEBI following a Securities Appellate Tribunal directive in 2023 and a Rs 40.35 crore payment to SEBI for a composite settlement covering regulatory inspections during 2021-22.
Partially offsetting these costs, NSE executed an offer for sale of a 9 percent stake in the National Securities Depository Limited, recording a pre-tax exceptional gain of Rs 1,200.94 crore. Divestment of its education subsidiary TalentSprint and KRA business units added exceptional pre-tax gains of Rs 114.14 crore and Rs 4.97 crore respectively.
Trading services revenue declined to Rs 15,043.67 crore in FY26 from Rs 15,559.46 crore in FY25, and clearing services revenue dropped to Rs 1,762.37 crore from Rs 2,525.31 crore. Equity options transaction charges contributed 77 percent of total transaction charges in FY26, reflecting the exchange’s high dependence on the derivatives segment.
The Ten-Year Regulatory History
NSE first filed draft papers for an estimated Rs 10,000 crore offering in December 2016. The listing was halted when investigations intensified into allegations that certain algorithmic trading brokers received preferential access to the exchange’s data servers through the co-location facility, allowing them to receive market data milliseconds ahead of other participants.
In January 2023, the Securities Appellate Tribunal set aside SEBI’s original disgorgement order of Rs 624.89 crore, reducing the penalty to Rs 100 crore and holding that the exchange was not guilty of fraud attributing the lapses to systemic human errors. SEBI challenged this ruling before the Supreme Court. In October 2024, NSE paid Rs 643.05 crore separately to settle allegations regarding misuse of its Trading Access Point architecture. NSE filed a settlement application with SEBI on June 20 2025, proposing Rs 1,387.39 crore to resolve the co-location case.
On March 27 2026, SEBI’s High-Powered Advisory Committee recommended a revised settlement of approximately Rs 1,800 crore to Rs 1,880 crore, comprising Rs 1,200 crore in disgorgement, Rs 380 crore in interest and the remainder under administrative settlement terms. This recommendation is currently awaiting final approval from SEBI’s panel of Whole-Time Members. Once approved and paid, SEBI and NSE are expected to file a joint application to withdraw the pending Supreme Court appeals.
Market Position and Analyst Views
NSE retained its position as the world’s largest equity derivatives exchange by contract volume in FY26, with over 36.99 billion contracts traded, according to the World Federation of Exchanges. Its registered investor base expanded at a CAGR of 26.9 percent, growing from 30.87 million in March 2020 to 129.1 million in March 2026, spanning over 99 percent of India’s postal codes.
NSE’s shares trade in the unlisted grey market at Rs 1,950 to Rs 2,050, implying an estimated market capitalisation of over Rs 5 lakh crore. Nitant Darekar, Research Analyst at Bonanza Portfolio, notes that at these levels NSE trades at approximately 45 times FY26 earnings below BSE at around 70 times and MCX at around 80 times, which he describes as rich but relatively contained within the exchange sector’s peer group.
Sarvam Goel, Founder at Pocketful, advises caution on entry at current grey market levels: “With unlisted shares currently trading around Rs 2,000, implying a market capitalisation of nearly Rs 5 lakh crore, significant optimism is already priced in. Given the moderation in earnings between FY25 and FY26, an IPO price around Rs 1,600 per share would offer a more balanced entry point for investors while ensuring healthy demand at listing.”
Rohit Jain, Managing Partner at Singhania and Co, expects the SEBI review to take longer than a standard filing: “NSE’s DRHP is unlikely to be a plain-vanilla review. Given its past regulatory overhang, market-infrastructure status, scale and large OFS, approval and observation timelines will certainly be longer.”
Key Risks Disclosed
The DRHP discloses four primary risk factors. First, the exchange’s revenue concentration in equity options which contributed 77 percent of total transaction charges in FY26 makes it highly sensitive to any SEBI-directed changes in derivatives market regulation aimed at cooling retail F&O participation. Second, as a critical market infrastructure provider, any technical failures or cybersecurity breaches carry regulatory and reputational consequences. Third, competitive pressure from BSE has intensified, with BSE capturing 55.4 percent of notional F&O turnover in April 2026, though NSE retained 66 percent of options premium turnover in the same period. Fourth, the co-location settlement of Rs 1,800 crore to Rs 1,880 crore remains pending final SEBI Whole-Time Member approval and any delay or rejection would renew legal uncertainty.
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