NSE Proposes Up To ₹1,400 Crore Settlement in Co-Location, Dark Fibre Cases Ahead of IPO

June 25, 2025 – In a significant pre-IPO development, the National Stock Exchange (NSE) has proposed a settlement amounting to ₹1,300 crore to ₹1,400 crore in relation to long-standing co-location and dark fibre controversies. This move is seen as a strategic step toward clearing regulatory hurdles before its much-awaited public listing.

According to people familiar with the matter, the proposal is pending approval from the Securities and Exchange Board of India (SEBI). If accepted, it could potentially clear the path for NSE’s long-delayed IPO.

Strategic Timing Ahead of IPO

In a letter dated Nov. 21, 2016, SEBI had approved the listing of equity shares on a recognized stock exchange, subject to compliance with applicable regulations. NSE’s board and shareholders had already cleared the proposal back in October and November 2016. At that time, neither NSE nor its group companies were barred from operating in the capital markets.

Background on the Cases

In 2019, SEBI barred NSE from accessing the securities market for six months due to lapses related to its co-location facility. While the Securities Appellate Tribunal later modified the financial penalties in 2023, it upheld the market ban, which has since expired. Notably, a partial settlement of the co-location case was reached in October 2024, when NSE paid ₹643 crore.

Implications for the Market

SEBI is also said to have laid out additional conditions for NSE’s IPO approval, including maintaining glitch-free operations, upgrading its technology infrastructure, and enhancing corporate governance standards. These measures aim to prevent past lapses from recurring.

Looking Ahead

With the settlement plan in motion, NSE appears committed to resolving past disputes and setting the stage for a smoother IPO journey, signaling a potentially transformative moment in India’s capital markets.

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