Kolkata: NSE, or National Stock Exchange, is the biggest stock exchange in India. With the equity cult growing fast, investors are growing by the day and business is growing organically all the time. NSE authorities applied to market regulator Sebi to float a public issue in 2016, but the regulator objected to it for some valid reasons and it has been hanging fire since. Now, in a statement which is sure to gladden the hearts of millions, Sebi chairman Tuhin Kanta Pandey’s has said the NSE IPO is imminent.
Many consider NSE to be one of the most high-profile public issues to hit the Indian market. Considering the future of equity investing in India and the pre-eminence of NSE as a market enabler, it is clear that such enthusiasm is not misplaced. At a recent event what Pandey has said has made it evident that the hurdles in the way of the proposed IPO are being dismantled.
Sebi chairman on NSE IPO
“Unless you want my tenure to be too short, it will see the light of the day,” Pandey said at an event, though he didn’t give any more details or a possible timeline. The comment, which is laced with jest, makes it clear that the decks are being cleared for this issue. The proposal that was submitted to the market regulator in 2016 was to raise Rs 10,000 crore by selling a stake of 22% in the company. However, Sebi raised a few objections and NSE is still waiting for the NOC (no-objection certificate) necessary to float a public issue. After receiving an NOS, a company submits the draft red herring prospectus (DRHP) and begin the final process for taking the IPO to the investors — institutional and retail.
Some of the Sebi objections to NSE IPO were due to some brokers allegedly getting unfair access to trading systems (referred to as co-location problems), issues with technology infrastructure, technical glitches as well as unresolved issues with its clearing corporation’s governance etc and some have already been addressed.
Total market cap vs GDP
Expressing satisfaction on the growth of the equity market, Pandey said that the capital market has really zoomed in the country and from market cap to number of investors, everything proves it. The number of investors has jumped from about 4 crore in FY19 to more than 13,5 crore now. Market cap was just abouot 69% of the country’s GDP in FY16 and it is now at 129%.
Pandey also did not attach too much importance to the FIIs offloading Indian equities. The SEBI chief said that while FPIs have sold stocks of about $4-5 billion, the total investment in India form this constituency is about $900 billion, indicating the figure is miniscule of the total pie. He added that SEBI is working to make the investment process more smooth and transparent for them.