NSE Eyes ‘Permitted to Trade’ Route Ahead of Its Big IPO

Mumbai, Aug 20: National Stock Exchange (NSE) is exploring a plan that would let its own shares trade on its own platform, even though the exchange itself won’t be formally listed there. Instead, NSE shares would carry their official listing on rival exchange BSE, according to a Bloomberg report citing people familiar with the matter, which was also reported by NDTV Profit. 

The news moved markets almost immediately. BSE’s own shares fell as much as 3% from the day’s high and closed down 1.51% at Rs 3,301.20, as investors weighed what more competition on trading volumes could mean for BSE. 

Here’s the idea behind the plan. Indian rules don’t allow a stock exchange to formally list itself on its own platform — that would mean the exchange effectively regulating itself, which regulators have long resisted. So NSE is looking at a workaround called “Permitted to Trade,” or PTT. This framework lets a company’s shares trade on a second exchange even though the company is officially listed only on its primary exchange. No separate listing agreement, extra disclosures, or listing fees are required with the second exchange — the company simply continues meeting its obligations to its primary listing venue. 

Under this plan, NSE shares would be listed on BSE, but investors would also be able to buy and sell them directly on NSE’s own platform through the PTT route. That would give the stock access to liquidity — and buyers — on both exchanges at once. 

The catch is that NSE can’t do this on its own. As a “market infrastructure institution,” it needs a formal go-ahead from India’s markets regulator, the Securities and Exchange Board of India (SEBI), before its shares could trade this way. Talks on the plan are reportedly ongoing, and whether it happens ultimately rests with SEBI. 

This isn’t a brand-new idea, either. Around 250 companies already trade on NSE under the PTT category without being formally listed there, according to NDTV Profit’s report. NSE also updated its rules back in 2019 so that PTT-listed securities could potentially be added to benchmark indexes like the Nifty — meaning that, if approved, NSE’s own stock could theoretically qualify for index inclusion down the line. 

The timing lines up with NSE’s long-awaited push to go public. The exchange is reportedly targeting SEBI’s approval for its draft IPO prospectus by the end of August, with the actual IPO expected to launch in the second half of September. NSE had first tried to list back in 2016, but that attempt was withdrawn amid regulatory hurdles; SEBI only cleared the exchange’s IPO application again earlier this year after NSE settled a long-running unfair market access case for Rs 1,388 crore. 

If SEBI signs off on the PTT plan, it would mark an unusual arrangement in Indian markets — NSE’s shares officially living on a rival’s books, while trading actively on NSE’s own turf. 

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)