National Stock Exchange of India Ltd. may allow its shares to trade on its own platform after listing them on rival BSE Ltd., people familiar with the matter said, a move that could eventually shift trading volumes and pave the way for the stock’s inclusion in NSE’s benchmark indexes.
The possibility was discussed with global investors during recent road shows for the exchange’s proposed initial public offering, the people said, asking not to be identified because the deliberations are private. Under the proposal, NSE shares could trade in the “permitted to trade” category even though they would formally list on BSE, the people said.
The present regulations do not provide for the self-listing of a stock exchange. NSE, which is classified as a market infrastructure institution, would need an approval from the Securities and Exchange Board of India to allow its shares to trade on its own platform, the people said. Discussions are ongoing and any such move would ultimately depend on regulatory approval, the people said.
A representative for NSE didn’t respond to requests for comment.
The “permitted to trade” framework allows securities to trade on the NSE without being formally listed, with their compliance and disclosure obligations unchanged, according to NSE’s website. NSE revised index eligibility rules in 2019 to allow such securities to qualify for inclusion in the Nifty indexes, India’s most broadly followed gauges. Previously, only shares formally listed and traded on the exchange were eligible.
About 250 companies that aren’t listed on NSE currently trade on its platform under the permitted-to-trade category. They include Elantas Beck India Ltd., Goodyear India Ltd. and Novartis India Ltd.
The arrangement could give NSE shares access to liquidity on both exchanges while retaining BSE as the primary listing venue, adding another dimension to what is expected to be one of India’s most closely watched IPOs.
NSE expects to receive SEBI’s approval for its draft prospectus by the end of August and is targeting an IPO launch in the second half of September, people familiar with the matter have said.
