Delhi HC dismisses plea against Sebi’s NOC for NSE IPO, says petition aimed at ‘banning’ listing

The Delhi High Court on Monday dismissed a petition challenging the no-objection certificate issued by capital markets regulator Sebi for the proposed IPO of the National Stock Exchange. This removes a legal hurdle in the exchange’s long-delayed listing plans.Justice Jasmeet Singh dismissed the plea filed by former judicial officer KC Aggarwal, noting that the petition appeared to have been filed only to “ban” the IPO process of the country’s largest stock exchange.

The order comes as a relief to the NSE, which has been trying to go public since 2016 but has repeatedly faced regulatory and legal hurdles.Aggarwal had moved the Supreme Court on February 10, challenging Sebi’s January 30 no-objection certificate, which allows NSE to formally resume the IPO process. The NOC allows the exchange to appoint investment bankers and legal advisors and begin preparing offering documents for listing.

At the heart of the petition was Sebi’s framework for adjustments to corporate actions, introduced to ensure that derivatives traders remain economically neutral during corporate actions such as bonus issues, stock splits and extraordinary dividends.

Aggarwal alleged that NSE had violated this framework by adjusting only prices and not quantities in certain derivatives contracts, and by debiting dividend equivalent amounts directly from derivatives traders’ accounts, including his own. He argued that under the Securities Contracts (Regulation) Act, dividends belong to shareholders and not derivatives traders, calling the debit “ultra vires the statute”.

The petitioner further alleged that his complaints with NSE were closed without hearing and that Sebi enforced the exchange’s actions without conducting an independent investigation. He also claimed that his requests for information about the debited money had been rejected, leaving an “information vacuum.” According to the petition, emails sent to the Sebi chairman from January 2026 had gone unanswered.

Aggarwal had urged the court to restrain Sebi from granting any approval for NSE’s IPO until the matter was fully investigated and addressed, arguing that the alleged violations had serious implications for investor protection and market integrity.

However, the Supreme Court refused to intervene in the case and dismissed the plea, effectively removing an immediate legal challenge to Sebi’s clearance for the IPO.

The NSE’s journey to IPO is one of the most followed and long-lasting in the Indian capital markets. The exchange first filed its IPO application with Sebi on October 18, 2016. The regulator withheld approval at the time due to concerns over governance failures, the co-location case involving preferential access to trading servers, and issues related to technology and internal controls.

Over the years, NSE has made several attempts to revive its listing plans. The appointment of Tuhin Kanta Pandey as Sebi chief in March 2025 marked a new impetus on the regulatory front. An internal committee was formed to look into the outstanding issues related to NSE’s IPO, culminating in the January 30 NOC, which indicated that the regulator was comfortable with the exchange going ahead in principle.