NSE Moves Closer to Settlement in Dark Fiber and Colocation Cases; IPO Path May Soon Clear
In a significant development, the National Stock Exchange (NSE) has approached the Securities and Exchange Board of India (SEBI) seeking a settlement of its long-pending regulatory cases. According to sources, the settlement offer includes a substantial sum of ₹1,000 crore and pertains to the infamous dark fiber and colocation cases that have haunted the exchange for years.
This move comes in the backdrop of a similar settlement order that SEBI had passed back in October 2023 related to the colocation case. NSE’s current push to resolve these matters signals its eagerness to close the regulatory overhang and move ahead with its much-awaited Initial Public Offering (IPO), which has been pending for an extended period.
It's important to note that these matters are currently being heard in the Supreme Court. If SEBI approves the settlement proposal, the regulator may seek to withdraw the cases from the court, paving the way for the final clearance or No Objection Certificate (NOC) required for NSE's IPO. This step would be crucial in opening the gates for public listing, which has remained in limbo due to these unresolved regulatory hurdles.
SEBI Chairman Tuhin Kanta Pandey has reiterated on multiple occasions that all pending issues related to NSE’s IPO will be resolved and that there will be no further obstacles in the way of the exchange’s listing plans. His comments reflect the regulator’s intent to bring closure to a chapter that has shadowed India’s largest stock exchange for years.
Currently, in the absence of NSE’s IPO, the Bombay Stock Exchange (BSE) continues to enjoy a monopoly in the listed exchange space. This has translated into exceptional stock market performance for BSE in recent years. Over the last five years, BSE shares have delivered a staggering return of over 5,500% to its investors. The absence of competition in the listed exchange segment and the limited number of trading platforms (primarily just NSE and BSE) has worked in BSE’s favor, offering investors no alternative despite the dominance of NSE in terms of trading volume.
Furthermore, BSE has actively expanded its product offerings, including the recent launch of Sensex options. This has played a pivotal role in boosting both its revenue and profitability.
On the other hand, NSE remains the undisputed leader in the derivatives and F&O (futures and options) space. It has high trading volumes in popular contracts such as Nifty, Bank Nifty, and Fin Nifty. The exchange serves as the primary platform for both retail and institutional players—big and small—who actively participate in these segments. This stronghold in the derivatives market has historically been NSE’s biggest revenue and profit generator, and post-IPO, the exchange is expected to offer robust returns to investors, owing to its market leadership, strong financials, and deep-rooted ecosystem.
With the settlement process now in motion, and if SEBI gives the green light, NSE’s IPO could finally be a reality. This would not only provide investors with a new avenue for exposure to India’s capital markets infrastructure but also intensify competition in the listed exchange space, potentially bringing further innovation and value to the ecosystem.
Disclaimer: This blog is for informational purposes only. It does not constitute investment advice. Readers are advised to consult financial experts before making any investment decisions. All data and insights are based on publicly available sources as of June 2025.
