As part of its attempts to go public and list its shares, the National Stock Exchange (NSE) is planning to file the public offer document for listing in India by January 2017.
At a meeting on June 23, the board of the country’s largest stock exchange in terms of market share, expressed its desire to file the draft red herring prospectus (DRHP) by January 2017.
Interestingly, the board has also advised the management to file for overseas listing by April 2017.
According to the regulatory norms, a DRHP has to be filed with the Securities and Exchange Board of India (SEBI) to formally initiate the process of listing.
A DRHP contains all the relevant company information (financials, management structure, segments of business, risk factors) based on which potential investors can decide whether to invest in the initial public offer (IPO). According to a statement issued by the exchange, to accelerate the listing procedures, the board has re-constituted the current Listing Committee as an empowered sub-committee of the board and the said committee will take decisions within a stipulated timeline.
The process of filing the DRHP will be initiated after addressing the restructuring needs of the exchange and the regulatory requirements for listing, according to the statement.
This will bring relief to many shareholders of NSE, including the State Bank of India and other public sector banks that have a sizeable stake in the exchange.
In the past, shareholders had even written to the board and senior management of the exchange to expedite its listing process so that there is greater transparency in pricing of shares and exits are facilitated on the stock exchange platform.
It was widely reported that NSE was not comfortable to list on its rival exchange BSE and wanted the regulator to allow self-listing, i.e., list its shares on its own platform.
Current regulations do not allow self-listing of exchanges in India.
Incidentally, BSE has already filed its DRHP with SEBI and is in the process of listing its shares.
BSE and NSE compete with each other in almost all the segments of capital markets, including equity and equity derivatives and currency derivatives.