NSE IPO NOC likely this month as SEBI agrees in principle to settlement

Pandey had previously indicated that the process is at an advanced stage.

• SEBI agrees in principle to settle, clearing a key hurdle for NSE's IPO
• NSE may soon get NOC to proceed with its long-delayed public listing
• SEBI urges stricter due diligence and sharper disclosures in IPO documents

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“In principle, we agree for settlement,” Securities and Exchange Board of India (SEBI) chairman Tuhin Kanta Pandey said on Thursday, indicating that a key regulatory hurdle for the National Stock Exchange’s (NSE) long-delayed initial public offering has been cleared.

Pandey’s remarks come amid heightened market focus on NSE’s listing prospects, after years of regulatory and legal overhang linked to the exchange’s unfair access case. The settlement, which SEBI has agreed to in principle, is widely seen as a crucial step towards granting the no-objection certificate (NOC) required for NSE to move ahead with its IPO.

Pandey had previously indicated that the process is at an advanced stage. Issuance of the NOC would allow NSE to initiate formal steps for listing, including filing its offer documents.

The SEBI chief also touched upon broader regulatory oversight in capital markets, reiterating the regulator’s focus on strengthening disclosure standards and due diligence, particularly in public issues.

At the event, Pandey reiterated that the role of merchant bankers is that of being “gatekeepers of transparency” in the IPO process. He said they sit at the centre of disclosure integrity, ensuring offer documents are clear, complete, and verifiable across business, risks, governance, and use of funds.

However, he said SEBI inspections continue to flag shortcomings.

“Our inspections show that due diligence is not always independent and at times relies on issuer undertakings,” Pandey said at the 14th Annual Convention of the All Investment Bankers’ Association.

He added that projections disclosed in offer documents — especially those related to working capital and capital expenditure — must be independently verified, with proper documentation maintained.

“Projections, especially for working capital and CapEx must be independently verified and backup papers must be maintained for all material statements,” he said.

Pandey further underlined the need for physical and on-ground verification by merchant bankers.

“Basic checks, such as site visits must be evidenced with complete reports of photographs with geodagging and timestamps,” he said, signalling SEBI’s expectation of more rigorous ground-level verification.

The SEBI chairman also flagged recurring disclosure gaps in IPO documents, noting that these reduce transparency and investor understanding and often lead to repeated regulatory queries, delaying fund-raising timelines.

He said disclosures need to be sharper in four key areas — risk factors, valuation rationale, objects of the issue and use of proceeds — and stressed the importance of clearer explanations of capital structure, particularly when changes occur close to a public issue.

“Disclosures on capital structure must clearly explain past capital raisings, preferential allotments and changes in control, especially close to the IPO,” Pandey said.