NSE IPO update from Sebi chairman: Also having a relook at listing obligations

Kolkata: Equity investors have been waiting eagerly to hear from market regulator Sebi on the IPO of NSE (National Stock Exchange). SEBI chairperson Tuhin Kanta Pandey has stated that the process of NSE IPO is progressing and added that a review of the LODR regulations has begun. LODR regulations refer to the Listing Obligations and Disclosure Requirements which govern listed companies in the country. These are of great significance since they lay out in detail the corporate governance standards, disclosure of material information and protection of investor interests that must be followed by listed companies in India.

Pandey also said that they will circulate a consultation paper before long and clarity on the NOC for the NSE IPO will be provided in due course. The NSE IPO is waiting for the NOC from the regulator before proceeding to float its public issue. The issue was first proposed in 2016 but has been hanging fire ever since.

The SEBI chairperson stated that the information regarding the NOC for the NSE IPO will be released in due course. He also remarked that the regulator is progressing with all processes in accordance with the regulations for the sake of investor confidence. Sebi had issues of transparency -- referred to as co-location controversy -- that led to the holding up of the NOC since 2016, when NSE proposed a Rs 10,000-crore IPO.

While speaking at the CII Financing National Summit, Pandey stated that SEBI has strengthened IPO regulations and has also modified some technical parameters. The Sebi boss also said that the review of Listing Obligation and Disposal Requirement needs detailed consultation with industry representatives and experts. Only after this stage is complete will there be a decision on the changes that will be made. Pandey said that their intention is to make the compliance process transparent and simple.

Significantly, chief economic advisor V Anantha Nageswaran said that many promoters use IPOs to exit companies rather than raising new funds for the business. On this point, the SEBI chief remarked that they have already tightened the necessary changes to the rules. Pandey said that purpose of an IPO depends on the company's needs. Many companies are in a strong financial position and are entering the market to create an opportunity for some investors to exit. Many companies also launch IPOs to raise new funds for new projects and expansion plans.

He said Sebi follows a policy of allowing all types of IPOs to enter the market, irrespective of what the purpose of the fundraising is. He said that the capital market should be such that companies can choose the right option at the right time depending on their needs.