The National Stock Exchange of India (NSE) may enable trading of its own shares on its platform following their listing on the Bombay Stock Exchange (BSE). Sources familiar with the developments indicated that this proposal was discussed with global investors during recent roadshows for the NSE’s initial public offering (IPO). These individuals requested anonymity as the talks remain confidential.

The plan involves categorising NSE shares under a ‘permitted to trade’ section, while BSE would continue to serve as the formal listing venue. The discussions regarding this plan are still in progress and hinge on the necessary regulatory approvals.

No official response has been received from representatives of NSE concerning this proposal as of now. Approval from the Securities and Exchange Board of India (Sebi) is required for such an arrangement, given the current regulations that prevent stock exchanges from listing their shares on their own platforms.

Understanding the ‘Permitted to Trade’ Framework

The ‘permitted to trade’ category allows certain securities to be transacted on the NSE without being officially listed there. According to information from the NSE’s official website, companies within this category are still subject to the same compliance and disclosure responsibilities as listed entities. In 2019, NSE amended its eligibility criteria for index inclusion, allowing these securities to qualify for the Nifty indexes.

Currently, about 250 companies, including Elantas Beck India, Goodyear India, and Novartis India, are able to trade on the NSE under this category without formal listing. This significant change enables a wider array of securities to participate in the market, increasing overall trading activity.

If NSE shares are permitted to trade under this framework, it would not only enhance liquidity but also offer investors access to trading on both exchanges concurrently. This could enable NSE shares to gain inclusion in its own benchmark indexes, thereby enriching the scope of its upcoming IPO.

Implications For NSE’s IPO

Should the proposal gain the necessary regulatory sanction, NSE shares could see trading activity on both BSE and NSE, even with BSE listed as the formal site. Such dual trading possibilities could present substantial liquidity options to investors. The prospect of NSE shares being integrated into its benchmark indexes adds an additional layer of interest to the anticipated IPO.

NSE is reportedly aiming to secure Sebi’s approval for its IPO draft prospectus by the end of August 2026. The exchange is targeting a launch window in the latter half of September, and it is expected that the listing will attract considerable attention as it represents a considerable advancement for India’s largest stock exchange.

This initial public offering marks a pivotal moment for NSE, reflecting its growth and future aspirations within the Indian financial market. Market observers are closely monitoring the process, given the potential implications for stakeholders involved.

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