Financial Insights

NSE’s IPO likely to be delayed for another year as SEBI continues its probe

Investors will have to wait even longer for investing in India’s largest bourse as SEBI’s regulatory probes into former officials of NSE seems to have set its IPO back even further. SEBI has ordered a probe into the former CEO Chitra Ramakrishna on allegation of violation of securities contract rules. This has led to a probe being launched by other agencies such as the CBI and Income Tax.

On 10th February, SEBI imposed a penalty of Rs 1 crore on NSE Ltd. and Rs 25 lacs each on Chitra Ramakrishna and Ravi Narain in connection with an ongoing three-year investigation in the co-location case. It was alleged that several brokers got preferential access through the co-location facility at the stock exchange, early login and dark fiber. Moreover, an order from SEBI stated that Chitra Ramakrishna shared sensitive information about the business of NSE with unknown individuals.

NSE had filed its DRHP with SEBI in 2016 for an OFS of nearly 111.4 million shares held by its investors. The company had hired CitiBank, JM Financial, Kotak Mahindra and Morgan Stanley as lead bankers for the IPO. The investors of the company have wanted the company to go public for a decade now but SEBI has ordered NSE to take back the DRHP due to an ongoing investigation into the scam. The IPO of the bourse was expected to arrive in 2022.

However, large investors are unlikely to exit their positions since the stock has grown 4-times in the past 2 years. The company reported a 56% YoY growth in its profits and its revenues doubled for the quarter ended on December 2021. The company has reported profits consistently and has witnessed robust growth.

Highlight by Aman Agarwal.

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