The long-delayed initial public offering of the National Stock Exchange (NSE) will require the Securities and Exchange Board of India (SEBI) to approach the Supreme Court to seek approval for settling the long-running co-location and dark fibre disputes before securing the no-objection certificate (NOC).
SEBI approves settlement in principle
SEBI has given in-principle approval to NSE’s proposal to settle the co-location and dark fibre cases for ₹1,388 crore under its settlement regulations, a move seen as critical to reviving the exchange’s public listing plans that have remained stalled for nearly a decade.
Internal review process
The proposal will now be examined by SEBI’s Internal Committee and High-Powered Advisory Committee being placed before a panel of whole-time members for final approval. Once the settlement amount is paid, SEBI is expected to pass a closure order, without NSE admitting any wrongdoing.
Settlement seen as key step for IPO
The settlement is widely viewed as a key step towards removing the regulatory overhang that has weighed on NSE’s IPO prospects. However, because SEBI itself has challenged an earlier Securities Appellate Tribunal (SAT) order before the Supreme Court, legal experts say the regulator cannot treat the settlement as a purely administrative exercise.
Supreme Court approval required
“Since SEBI is itself the appellant before the Supreme Court, it cannot close the matter on its own,” said B. Shravanth Shanker, Advocate-on-Record, Supreme Court of India. “The correct procedural route is for SEBI to file an affidavit and an interlocutory application seeking permission to withdraw or have the appeal disposed of in terms of the settlement.”
Settlement procedure under SEBI rules
Under SEBI’s settlement regulations, where proceedings are pending before a court, the regulator and the settling party are required to place the settlement before the court for appropriate orders. The Supreme Court will then examine whether the settlement is lawful and not contrary to public interest before disposing of the appeal.
Legal experts stress judicial sanction
“The matter remains legally sub judice, with connected proceedings pending before the Supreme Court,” said Madhura Samant, Managing Partner, Elarra Law Offices. “As a cautious and prudent course, the terms of settlement must be placed before the Supreme Court for its consideration. The Court need not revisit the merits, but judicial acknowledgment would lend legal sanctity, ensure procedural finality, and eliminate any residual doubt that could potentially affect investor interests.”
SEBI timeline for IPO NoC
SEBI chairperson Tuhin Kanta Pandey recently said that the IPO NOC could be issued within a month. Lawyers, however, caution that the NOC is unlikely to be unconditional until the Supreme Court formally records the settlement and disposes of the appeal.
The settlement route is viewed as the most feasible way forward. “Courts generally permit settlements in regulatory matters where public interest is safeguarded,” said Alay Razvi, Managing Partner at Accord Juris. “Once the Supreme Court grants permission, the final legal barrier to NSE’s IPO would stand removed. However, this process may take a few months.”
Next steps for NSE IPO
Once the Supreme Court closes the matter, NSE can refile its draft red herring prospectus (DRHP). The exchange will then be required to undergo SEBI’s disclosure review under the ICDR framework, obtain in-principle listing approval, likely from BSE, and proceed to book-building and listing.
Published on January 19, 2026
