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- NSE IPO Draft Paper Possible By March End; SEBI Approves ₹1,387 Cr Settlement
Mumbai3 minutes ago
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SEBI has given in-principle approval to the settlement application of NSE i.e. National Stock Exchange in the co-location case. After this decision, the biggest legal hurdle of NSE IPO which was stuck for almost a decade has been removed. SEBI Chairman Tuhin Kant Pandey gave this information on January 15.
According to the report of news agency Reuters, after getting the regulatory clearance, NSE can now file its Draft Red Herring Prospectus (DRHP) i.e. listing papers by the end of March. For this, the exchange has started talks with investment bankers and law firms.
It is expected that by the end of this month, NOC will be issued by SEBI, after which the consultants will be formally appointed. NSE is the largest stock exchange in the country.
IPO stuck since 2016 due to co-location case
NSE has been trying to get listed in the stock market since 2016. But due to the investigation of the co-location case, it was not getting approval. Last year, NSE had proposed to settle the matter by paying Rs 1,387 crore, which has now been accepted by SEBI.
- NSE was accused that some select brokers of the exchange were getting ‘fast access’ to market data or information a few seconds earlier than the rest of the investors.
- The facility of setting up servers of these brokers (co-location) was given in the data center of the exchange itself, which was allegedly misused by some brokers to earn profit.
Government approved to sell 2.5% stake
SEBI Chairman also said that the government has also given green signal to the proposal to reduce the stake in the exchange by 2.5%. Its notification will be issued soon.
In the year 2024, SEBI had changed the rules for big IPOs. Now companies with value of more than Rs 5 lakh crore can be listed by selling only 2.5% stake, whereas earlier this limit was 5%. This has made the path of listing easier for big companies like NSE.
Demand increased in unlisted market, shares rose by 15%
As the buzz of IPO increases, the demand for NSE shares has increased in the unlisted and gray market. In the last few days, the price of its shares has jumped by 10 to 15%. At present, the valuation of NSE in the unlisted market is estimated to be around Rs 5 lakh crore. Its shares are trading around Rs 2,095. However, the official valuation will be known only at the time of listing.
Country’s largest unlisted company, 1.77 lakh shareholders
NSE is the largest unlisted company in India in terms of number of shareholders. It has a total of 1,77,807 shareholders. Managing such a large base during the IPO and providing exit opportunities to institutional investors like banks and foreign funds will be a big challenge for lawyers.
Unlisted market is the market where shares of companies which are not yet listed on the stock exchange (like BSE or NSE) are bought and sold. Here investors buy shares of a company even before its IPO so that they can earn big profits at the time of listing.
Since these shares are not on the exchange, they are traded directly between two people or through brokers and the risk in this is also higher than in the stock market because there is less monitoring by the regulator.
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