Securities and Exchange Board of India (SEBI) chairman Tuhin Kanta Pandey has signaled significant progress in the National Stock Exchange's long-awaited initial public offering, stating that the regulator may issue the No Objection Certificate (NOC) for the NSE IPO "within this month." The remarks were made during the sidelines of an event in Chennai and represent a major development in the much-anticipated public listing.

Current IPO Timeline and Process

NSE CEO Ashish Chauhan had provided a detailed timeline estimate in a September 2025 interview with CNBC TV18, projecting an eight to nine-month period before the exchange could be listed. The process breakdown includes approximately four months for preparing the draft red herring prospectus (DRHP) after receiving the NOC, followed by another four months for SEBI's review and addressing any regulatory queries.

NSE's Current Shareholding Structure

The exchange is already positioned for public listing with a substantial existing shareholder base. NSE currently has approximately 1.72 lakh shareholders and operates without any promoter stake, which demonstrates its institutional readiness for public market participation once regulatory clearances are secured.

Historical Delays and Regulatory Concerns

The IPO process has experienced significant delays since the initial DRHP filing in 2016. NSE has made multiple attempts to secure the NOC, submitting applications once in 2019, twice in 2020, and again in August 2024. Progress has been impeded by various regulatory concerns, including cases related to co-location and dark fiber access issues.

Outstanding Regulatory Matters

Pandey had previously outlined the key areas under discussion between NSE and SEBI in an April 30 statement to Moneycontrol. The regulatory discussions encompass several critical areas that need resolution before the IPO can proceed.

The key discussion points include:

• Governance frameworks and structures
• Technology infrastructure and systems
• Pending litigation matters
• Clearing corporation operations and oversight

The exchange has been actively addressing these regulatory matters as part of its ongoing engagement with SEBI to clear the path for its public listing. Pandey had indicated that resolution of these issues with a clear roadmap would enable the IPO to move forward, setting the stage for the current positive developments in the approval process.

India's market regulator is poised to clear a major regulatory hurdle for the National Stock Exchange's long-awaited initial public offering, potentially ending years of uncertainty surrounding the listing of the country's largest stock exchange. Securities and Exchange Board of India chairman Tuhin Kanta Pandey announced at a press conference in Chennai that the no-objection certificate will be issued soon, possibly before month-end.

NSE IPO Regulatory Clearance

"Sebi's no-objection certificate will be issued soon, possibly before the end of this month. It is then up to NSE to take the process forward," Pandey stated during the press conference held on Saturday. This announcement represents a significant development for NSE, which has faced prolonged delays in its public listing plans.

The IPO process encountered substantial obstacles due to the dark fibre case, which involved serious allegations regarding market fairness. The case centered on claims that certain high-frequency traders received preferential access to NSE's co-location servers between 2010 and 2014 through faster private communication lines, enabling quicker trade execution and potentially creating unfair advantages.

Unlike ordinary companies, market infrastructure institutions such as stock exchanges, depositories, and clearing corporations must obtain a no-objection certificate from Sebi before submitting their draft red herring prospectus. This additional regulatory step reflects their critical importance to the stability and functioning of India's financial markets.

T+0 Settlement Framework Challenges

Pandey also addressed the limited adoption of Sebi's T+0 settlement framework, under which trades are settled on the same day. India became the first country to adopt a T+1 settlement cycle for all listed stocks in January 2023, and subsequently introduced an optional T+0 settlement cycle in March 2024.

The T+0 framework initially covered 25 scrips and was expanded in December 2024 to include the top 500 stocks starting January 31, 2025. However, Pandey acknowledged significant implementation challenges.

"This is creating significant challenges, and few are willing to undertake it. The benefits appear limited, and given the level of disruption it causes, it does not seem worthwhile," Pandey explained during the press meet.

Mutual Fund Expense Ratio Framework

Regarding mutual funds, Pandey announced that Sebi will shortly notify a framework to allow performance-linked expense ratios. This proposal was initially introduced in an October consultation paper as part of broader transparency improvements around fees charged by fund houses.

"A notification will be issued in a day or two to enable it. Then Sebi will work with the industry to benchmark the performance. Performance management is the tricky part here," the Sebi chairman stated.

Corporate Bond Market Initiatives

Speaking at the 5th Association of National Exchanges Members of India International Capital Market Convention 2026, Pandey outlined plans to introduce bond derivatives to deepen the corporate bond market. The regulator has taken concrete steps to make the corporate bond market more accessible for both issuers and investors.

"We are examining bond derivatives as another initiative. Growth of municipal bonds is also being facilitated through regulatory reforms and outreach programs," he said.

Technology and Surveillance Enhancements

Sebi is increasingly leveraging artificial intelligence to strengthen market surveillance and investor protection. The regulator has implemented the Sebi Sudarshan system to detect fraudsters on social media who pose as registered advisors to mislead investors.

"We are developing an AI tool to analyze cyber audit reports and identify gaps before they become breaches. We have to keep in mind that AI can augment judgment - it cannot replace human accountability," Pandey emphasized.

Additionally, Sebi is working to simplify KYC processes by reducing repeat documentation and streamlining re-KYC procedures, with public consultation on these proposals expected to follow shortly.