New Delhi [India], February 28 (ANI): The National Stock Exchange (NSE) will not list its shares on its own platform when it goes public, said Managing Director and Chief Executive Officer Ashish Chauhan, underlining that Indian regulations prohibit exchanges from self-listing.

In an interview with ANI, Chauhan explained that as a regulated institution, the NSE cannot regulate itself, and therefore must seek listing on an alternative exchange(s).

'It's a regulation of India, and we have to abide by that,' he said.

Following the recent grant of a no-objection certificate by the Securities and Exchange Board of India (SEBI) after nearly a decade-long wait, the exchange has begun preparations for its initial public offering (IPO).

Chauhan said the bourse will take a few months to prepare and file its Draft Red Herring Prospectus (DRHP). After that, SEBI will review the document and provide further clearance.

Due to regulatory requirements in India, the NSE must list on an alternative exchange, such as the Bombay Stock Exchange (BSE) or another recognised platform. While some global exchanges, such as Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE) are listed on their own trading platforms, India's regulatory framework does not permit such an arrangement.

Regarding the IPO valuation, Chauhan indicated that it would be premature to speculate. He noted that pricing decisions are typically finalised close to the IPO launch and depend heavily on prevailing market conditions. Merchant bankers appointed to the issue advise the company's IPO committee on the appropriate offer price, considering financial performance, industry comparables, growth trends, and broader economic and geopolitical factors.

Given market volatility, he suggested that any current estimates circulating in the public domain should be taken with a 'pinch of salt.'

NSE's potential valuation of around USD 50 billion, which market watchers have pegged, according to Chauhan, is speculative.'You have to take it with a pinch of salt, right? Because what happens on the actual listing, you don't know,' he said, referring to the market rumours.

Notably, the proposed IPO will not involve the NSE raising fresh capital. Instead, it will be structured as an Offer for Sale (OFS), a common route in Indian markets where existing shareholders dilute part of their holdings.

Chauhan said the exchange will invite its current shareholders to indicate whether they wish to sell a portion of their shares in the IPO. The proceeds from the sale will go directly to those shareholders, not to the company.

The NSE currently has nearly 195,000 shareholders, all of whom collectively own 100 per cent of the exchange.

'We are not going to raise money for ourselves. We will take shares from our existing shareholders, asking them first if they want to sell in the IPO; this is called an Offer for Sale (OFS). You give it to us. With that, we will go to SEBI, saying that these are the people wanting to sell their shares, and allow us to do an IPO. So we will come out with the prospectus with their shares owned by them and offer it to the public. And then it starts trading, and then everyone can trade, including our existing shareholders and future shareholders. Then that money, which the new IPO shareholders give, goes to the people who are selling,' he said.

Chauhan described the proposed IPO as largely procedural, aimed at providing liquidity to existing investors rather than funding expansion, noting that the exchange is profitable enough to meet its growth plans. He emphasised that listing and trading are distinct concepts.

While the NSE will list on another exchange, its shares could potentially be traded across multiple platforms, subject to regulatory approvals. Listing, he explained, enables broader participation and enhances liquidity for shareholders.

Chauhan also argued that public listing can strengthen transparency and governance. With a wider shareholder base and active market scrutiny, management decisions are subject to greater questioning by investors and the media. He suggested that public ownership often surfaces concerns or operational issues that may not always be detected through regulatory inspections alone.

Drawing parallels with other large public institutions that have listed in recent years, Chauhan indicated that market discipline and disclosure norms tend to enhance governance standards over time. Given the NSE's role as a key public utility in India's financial system, he expressed the view that listing would align with broader principles of accountability and openness.

'So my fundamental belief is that any public utility, which the NSE is, should be listed, whether it is an electricity utility, a stock market utility or any other utility...And it has been proved beyond doubt that corporate governance improved after LIC (Life Insurance Corporation) was listed. And that is true with, if you see any large organisations, because you have to give out information in real time when material things happen...In real time, investors can figure out, ask questions, even the media can ask,' he explained. (ANI)