National Stock Exchange Explores Trading Its Own Shares on Its Platform Ahead of Proposed IPO

The National Stock Exchange of India Ltd. (NSE) is reportedly exploring a proposal to allow its shares to trade on its own platform after listing them on rival BSE Ltd. According to people familiar with the matter, the move could place NSE shares in the exchange’s 'permitted to trade' category, potentially providing the stock with access to liquidity across both exchanges.

This possibility was discussed with global investors during recent road shows for the exchange’s proposed initial public offering (IPO). Because current regulations do not provide for the self-listing of a stock exchange, the NSE—classified as a market infrastructure institution—would require formal approval from the Securities and Exchange Board of India (SEBI) to execute this arrangement.

Discussions regarding the proposal are ongoing and depend entirely on regulatory clearance. Representatives for the NSE did not respond to requests for comment on the matter.

Under the 'permitted to trade' framework, securities can trade on the NSE without being formally listed, while their compliance and disclosure obligations remain unchanged. The NSE previously revised its index eligibility rules in 2019 to permit such securities to qualify for inclusion in the Nifty indexes. Currently, about 250 companies that are not formally listed on the NSE trade on its platform under this category, including entities such as Goodyear India Ltd., Novartis India Ltd., and Elantas Beck India Ltd.

By utilizing this arrangement, NSE shares could secure dual-exchange liquidity while retaining BSE as the primary listing venue. This development adds a unique structural dimension to what is anticipated to be one of the market's most closely watched public offerings.

Market participants expect the NSE to receive SEBI’s approval for its draft prospectus by the end of August, with the exchange targeting an IPO launch in the second half of September, according to sources tracking the deliberations.

"The proposal by the NSE to utilize the 'permitted to trade' category for its own shares after a BSE listing is an interesting structural approach to managing liquidity and index eligibility. Because current regulations do not allow the self-listing of a stock exchange, securing regulatory approval from SEBI will be the critical hurdle for this plan. As the exchange moves toward its anticipated September IPO timeline, market observers will be watching closely to see how regulatory frameworks adapt to accommodate market infrastructure institutions seeking dual-platform visibility." — Dr. Shishir Gupta, Founder & CEO, StartupLanes