NSE may allow its shares to trade on its own platform after BSE listing
The National Stock Exchange of India (NSE) is considering a plan that could allow its own shares to trade on its platform after the exchange completes its proposed initial public offering (IPO) and...
The National Stock Exchange of India (NSE) is considering a plan that could allow its own shares to trade on its platform after the exchange completes its proposed initial public offering (IPO) and lists the shares on rival BSE.
The proposal was discussed with global investors during recent roadshows for the NSE IPO, according to a report by Bloomberg cited by Business Standard and Business Today. Under the plan, NSE shares could formally list on BSE while also being admitted for trading on NSE under the exchange’s existing “permitted to trade” framework.
The proposal is still under discussion and would require approval from the Securities and Exchange Board of India (SEBI). Current regulations do not specifically provide for a stock exchange to list or trade its own shares on its platform. NSE is classified as a market infrastructure institution, which means any such arrangement would need regulatory clearance.
The “permitted to trade” system allows securities to trade on NSE without being formally listed on the exchange. A company using this route remains formally listed on another exchange, while its shares can also be traded on NSE. The framework does not remove the company’s existing compliance and disclosure responsibilities.
NSE has used this system for a large number of securities. Around 250 companies that are not formally listed on NSE currently trade through the permitted-to-trade route. Companies in this category include Elantas Beck India, Goodyear India and Novartis India.
The proposal could give NSE shares access to investors and trading liquidity on both BSE and NSE. It could also have implications for the stock’s eventual eligibility for NSE’s benchmark indices.
NSE changed its index eligibility rules in 2019 to allow permitted-to-trade securities to qualify for inclusion in Nifty indices. Previously, only securities formally listed and traded on the exchange could be considered for the indices. This change could become significant if NSE’s proposed structure receives regulatory approval.
The development comes as NSE prepares for what is expected to be one of India’s most closely watched IPOs. The exchange is reportedly targeting a launch in the second half of September and is expected to seek SEBI approval for its draft prospectus by the end of August.
The proposed listing is attracting attention because NSE is one of the central institutions in India’s equity market. Its platform handles a large share of India’s stock and derivatives trading, making its eventual public listing significant for investors as well as the wider financial sector.
For investors, the proposed dual-market trading arrangement could make NSE’s shares more widely accessible once the IPO is completed. However, the plan is not final and remains subject to regulatory approval.
The next major step will be SEBI’s decision on whether NSE can use the permitted-to-trade route for its own shares. Until that approval is granted, the proposal remains under consideration rather than being an established feature of NSE’s upcoming listing.
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