Delhi High Court dismisses plea challenging Sebi’s NOC, clears legal hurdle for NSE IPO

New Delhi: The Delhi High Court on Monday dismissed a petition challenging the no-objection certificate (NOC) granted for the proposed initial public offering (IPO) of the National Stock Exchange (NSE), removing a significant legal hurdle in the exchange’s long-pending listing plans.

The court observed that the plea appeared to be aimed at halting or delaying the IPO process of the country’s largest stock exchange. The petition had questioned the NOC issued on January 30, which enables NSE to restart preparations for going public after years of regulatory delays.

With the clearance in place, NSE can now move ahead with appointing merchant bankers and legal advisers and begin drafting the offer documents required for listing.

The exchange had first filed its IPO application in October 2016, but the proposal was put on hold due to governance concerns, including the co-location case and issues related to technology systems and internal controls.

The petitioner alleged that NSE had violated Corporate Action Adjustment rules framed by the Securities and Exchange Board of India (Sebi). These rules are intended to ensure fairness for derivatives traders during corporate actions such as bonus issues, stock splits and special dividends.

According to the plea, NSE adjusted only prices and not quantities in certain derivative contracts, potentially disadvantaging traders. It also alleged that dividend-related amounts were deducted from derivatives traders’ accounts without legal authority. The petitioner further contended that complaints were closed without proper hearings and that requests for information were rejected.

The High Court declined to interfere and dismissed the plea, effectively allowing the IPO process to proceed without immediate judicial obstruction. The ruling is widely seen as a relief for NSE, which has faced multiple regulatory and legal challenges over the past decade.

The recent NOC from Sebi had signalled the regulator’s comfort, in principle, with the exchange proceeding with its listing plans. With the court’s order, NSE’s much-awaited market debut appears closer than ever.