NSE IPO delayed: SEBI puts listing on hold over compliance issues

The highly anticipated Initial Public Offering (IPO) of the National Stock Exchange (NSE) may not happen for another two years, according to reports. The Securities and Exchange Board of India (SEBI) has flagged regulatory shortcomings and advised the exchange to put its IPO plans on hold. The delay comes as a setback for investors eyeing NSE's public listing, especially those considering share market investment in India's booming financial sector.

Pending approvals stall NSE's listing

NSE initially filed for an IPO in December 2016 but has faced multiple delays over the years. The exchange's request for a No Objection Certificate (NOC) from SEBI, submitted in August last year, is still under review. Without SEBI's approval, NSE cannot proceed with its listing, making it imperative for the exchange to resolve the regulatory concerns at hand.

Industry experts question SEBI’s stance

Some analysts believe that certain concerns flagged by SEBI extend beyond its direct regulatory scope and may not be directly linked to the IPO process. Despite this, NSE will have to comply with all requirements before it can secure a green light for the listing. The delay has left investors uncertain about the timeline for NSE’s public debut, which was expected to be one of the most significant stock market events in India.

Faster share transfers bring liquidity boost

In a separate development, NSE shares, which once took over a month to transfer between shareholders, can now be transferred within a week. This improvement comes after the activation of NSE's International Securities Identification Number (ISIN), officially marking the shares as "defreezed."

This update streamlines the transfer process, eliminating the need for direct intervention by NSE. Previously, buying NSE shares required a two-step process, including Know Your Customer (KYC) verification and a "fit and proper" assessment. Now, with ISIN activation, depositaries will handle verification, making share transactions more efficient.

What this means for investors

With the improved transfer process, liquidity in NSE's unlisted shares is expected to increase, attracting more investors. Currently, the exchange has over 20,000 shareholders, and with easier share transfers, participation in NSE's unlisted shares may rise significantly. While the IPO delay presents a temporary hurdle, these operational improvements could benefit those involved in share market investment before NSE eventually goes public.