National Stock Exchange of India, the country's largest exchange, is preparing to file its draft prospectus for its long-awaited public listing by the end of March, according to sources familiar with the development. The move marks a significant step forward for what could potentially become one of India's largest initial public offerings.

IPO Preparation and Timeline

The exchange is currently in discussions with investment bankers and law firms to finalize the prospectus and assess investor appetite for the offering. Formal appointments of bankers and lawyers will follow after receiving a no-objection certificate from the Securities and Exchange Board of India (SEBI). On Saturday, SEBI's chairperson indicated that the regulator could "possibly" grant the required approval for NSE's listing this month.

Current Valuation and Market Position

NSE's financial metrics reflect its dominant market position:

For comparison, its smaller listed peer BSE Ltd currently trades at ₹2,767 per share. NSE has not yet indicated what percentage of its equity would be offered to the public.

Regulatory Challenges and Settlement

The listing process has faced significant delays since NSE first attempted to go public in 2016. The primary obstacle has been regulatory investigations into the exchange's conduct regarding fair market access for traders through its co-location facilities. This case remains pending in India's Supreme Court.

Shareholder Structure and Exit Strategy

NSE's complex ownership structure presents unique challenges for the IPO process. With 1,77,807 shareholders, it stands as India's largest unlisted company by number of investors. Lawyers drafting the IPO documents are developing mechanisms to ensure fair exit opportunities for this extensive shareholder base.

Preference for exit is likely to be given to banks and foreign institutions that have held NSE shares for extended periods. The exchange's top institutional shareholders include several prominent entities:

• Life Insurance Corporation of India
• State Bank of India
• Temasek Holdings
• Morgan Stanley
• Canada Pension Plan Investment Board

Market Significance

The successful completion of NSE's IPO would represent a landmark event for India's capital markets, given the exchange's central role in the country's financial ecosystem. As both India's largest exchange and the world's most active derivatives trading platform, NSE's public listing has been one of the most anticipated offerings in the Indian market for several years.

National Stock Exchange of India Ltd, the country's largest exchange, is preparing to file its draft prospectus for its long-awaited public listing by the end of March, according to two people familiar with the matter. The move represents a significant step forward for what could become one of India's biggest initial public offerings.

IPO Preparation and Market Valuation

The exchange is currently in discussions with investment bankers and law firms to finalize the prospectus and assess investor appetite for the offering. While NSE has not disclosed the percentage of equity to be listed, market indicators suggest substantial investor interest.

Formal appointments of bankers and lawyers will follow receipt of a no-objection certificate from the Securities and Exchange Board of India (SEBI). Early discussions have already commenced, with SEBI's chairperson indicating the regulator could "possibly" grant required approval this month.

Regulatory Challenges and Settlement

India's biggest bourse and the world's most active derivatives exchange has been attempting to list since 2016. The listing approval has been delayed due to regulatory investigations into the exchange's conduct regarding fair market access for traders via co-location facilities.

NSE offered to settle the co-location matter by paying ₹1,387.00 crores ($154 million), with SEBI still considering the settlement proposal.

Complex Shareholder Structure

Pre-listing, NSE has 177,807 shareholders, making it India's largest unlisted company by number of investors. This extensive shareholder base adds complexity to the public listing process, with lawyers working on mechanisms to ensure fair exit opportunities.

Preference for exit opportunities is likely to be given to banks and foreign institutions that have held NSE shares for extended periods. The complex shareholder structure requires careful legal frameworks to manage the transition from unlisted to public status.

Market Position and Trading Activity

NSE's unlisted shares currently trade at over ₹2,000.00 per share on platforms like Unlisted Arena, which facilitates trading of unlisted securities. This valuation places the exchange at approximately ₹5,00,000 crores or $55 billion, significantly higher than its listed peer BSE Ltd, which trades at ₹2,767.00 per share.

The successful completion of NSE's IPO would mark a significant milestone for India's capital markets, bringing the country's largest exchange to public investors after years of regulatory scrutiny and preparation.