On December 28, 2016, the company that operates India’s biggest stock exchange where thousands of other companies are traded daily made its first attempt to list its own shares publicly. But the proposal soon ran into a regulatory wall.
It has taken the National Stock Exchange nine-and-a-half years to climb that wall.
This week, the NSE again filed draft papers for an initial public offering that could help its existing shareholders raise around Rs 30,000 crore by selling part of their holdings. That’s thrice the amount planned a decade ago.
Those plans were overshadowed by the co-location controversy, in which certain brokers were accused of receiving preferential access to the exchange’s trading systems. Regulatory scrutiny intensified and approvals stalled.
After years of litigation and compliance measures, the Securities and Exchange Board of India earlier this year granted an in-principle approval to the NSE’s settlement application in the case. In fact, the NSE has now disclosed an amount of Rs 1,491 crore to settle that case, removing one of the final hurdles standing between it and the public markets.
The IPO will consist entirely of an offer for sale of a 6% stake. State Bank of India, Bank of Baroda, Stock Holding Corporation of India, several public-sector insurers and foreign investors such as Morgan Stanley and Singapore government-owned Temasek will reduce their holdings. NSE itself won’t raise any fresh capital.
The NSE IPO would potentially be India’s largest. It will overtake share sales by Hyundai India, LG Electronics India, Life Insurance Corp, Tata Capital and Paytm. But it could soon be dwarfed by the planned IPO of Reliance Jio. India’s biggest telecom operator is planning an IPO worth about $4 billion (Rs 34,000-35,000 crore) that could value it over $180 billion.
The IPO size isn’t the only factor that makes the NSE filing significant. Another one is that the exchange could list at a valuation of nearly Rs 5 lakh crore, or about $53 billion, making it one of the most valuable companies in the country.
Yet the regulatory journey, while important, doesn’t explain why the exchange may now be worth several times more than when it first attempted to list.
Exchanges were once viewed largely as market utilities. Their role was straightforward: provide the infrastructure that allows buyers and sellers to meet.
Over the past decade, however, India’s capital markets have undergone a profound transformation: Millions of new investors have entered the market, Demat accounts have multiplied, SIPs have become a mainstream savings vehicle, domestic investors have become an increasingly important source of market liquidity, and the financialisation of household savings has steadily expanded the universe of people participating in capital markets.
The NSE sits at the centre of that shift. The exchange reported profit after tax of Rs 10,302 crore in FY26 and remains one of the most profitable institutions in Indian finance. More importantly, it benefits whenever participation in the market expands, whether through investing, trading, listing or capital raising. In that sense, investors are not simply being asked to value an exchange. They are being asked to place a value on the growth of Indian capital markets themselves.
That may also help explain the timing, as India’s primary market appears to be entering another active phase.
That matters because exchanges benefit not only from trading activity but also from the broader expansion of capital-market participation. More listings, more investors, more fundraising and more market activity all reinforce the value of the marketplace itself.
Markets often focus on the companies that list. The NSE filing shifts attention to the marketplace itself. For years, the exchange’s public listing was delayed by questions about governance and regulation. Those questions mattered and took years to resolve.
What stands out today is something else. The marketplace that once struggled to enter the market may now be one of its most valuable businesses. And that may say as much about the evolution of Indian investing as it does about the exchange itself.
The Return of Normal
Talking about waiting, the week gone by recorded a far move pivotal moment that people around the world had been waiting for the past few months—a deal to end the war in the Middle East. That moment has now arrived. Well, almost.
The US and Iran this week signed a memorandum of understanding aimed at reducing tensions and establishing a framework for a broader peace process in West Asia.
Now, we are no experts in geopolitics but a cursory reading suggests Iran may have managed to extract more than its pound of flesh. The 14-point MoU states that the two countries will cease military operations, including in Lebanon, though it doesn’t mention Israel. It notes that the US will remove its naval blockade, end all sanctions against Iran and work with “regional partners” to create a fund of at least $300 billion for Iran’s reconstruction and development!
On its part, Iran won’t develop nuclear weapons—a position it has reaffirmed previously. And it will ensure safe passage for ships from the Strait of Hormuz without charging any toll for 60 days, but doesn’t promise that it won’t charge any fees after the initial period.
Anyway, the reaction to the peace deal was immediate. Brent crude, which briefly traded near $120 a barrel during the height of the crisis, fell below $80 this week. Equity markets rallied across regions. Gold retreated from recent highs and concerns about another energy-driven inflation shock began to ease. Meanwhile, the US Federal Reserve refrained from lifting interest rates to combat the surge in inflation.
The scale of the move reflects more than relief. It reflects a reassessment of risk. During the conflict, financial and commodities markets were forced to contemplate disruptive scenarios that had previously received little attention.
The Strait of Hormuz, which carries roughly one-fifth of the world’s energy supply, became a focal point for investors trying to understand how far the disruption might spread. Higher oil prices began feeding into concerns about inflation, growth, interest rates and global trade. Today, many of those fears are being reassessed.
That does not mean those fears have disappeared. The memorandum creates a pathway towards stability. It does not guarantee it. Several issues remain unresolved, and the durability of the agreement will only become clear over time.
Yet markets are not waiting for certainty. They rarely do.
Investors are not attempting to determine whether every geopolitical risk has vanished. They are trying to determine whether the probability of a severe disruption is lower than it was a few weeks ago.
The answer increasingly appears to be ‘yes’.
That shift matters well beyond commodity markets.
For India, which imports more than 85% of its crude oil requirements, lower energy prices can ease inflation pressures, support the rupee and reduce pressure on the current account. Bond markets may also welcome an environment in which oil is no longer threatening to complicate the inflation outlook. Already, stock markets have climbed since the deal was signed and rupee has strengthened. Talk of a rate hike by the Reserve Bank of India have subsided, too.
More broadly, the episode offers a reminder of how markets process uncertainty.
Prices rarely wait for outcomes. They respond to changes in probability.
A few weeks ago, investors were focused on how severe the disruption could become. Today, they are trying to assess how much of that disruption still needs to be priced in.
The debate is no longer centred on the worst-case scenario. It is centred on how quickly conditions might move back towards something that resembles normal.
More Than a Model
Moving from geopolitics to the fast-evolving realm of artificial intelligence, Anthropic suspended access to Claude Fable 5 and Claude Mythos 5 this week for non-US customers after receiving an order from US authorities. The decision came only days after their public release and quickly sparked debates about cybersecurity, safety and access.
The most interesting part of the story may have begun before the suspension. In the weeks leading up to the launch, Anthropic spent considerable time discussing not only what the models could do, but also the risks that came with those capabilities. The company described Fable 5 as the most capable model it had ever made generally available.
At the same time, it highlighted safeguards designed to reduce misuse, limited access before the public release and discussed concerns about the model’s ability to identify vulnerabilities and interact with complex computer systems.
Technology companies typically celebrate improvements in capability. Anthropic did that too. But it was also asking users, regulators and researchers to think about the consequences of those improvements. The tension became visible almost immediately.
According to Anthropic, US authorities raised concerns about a technique for bypassing some of the models’ safeguards. The company argued that the vulnerabilities identified were relatively minor and could be discovered using other publicly available systems. Nevertheless, it disabled both Fable 5 and Mythos 5 in order to comply with the order.
The reaction that followed revealed how many different interests are now attached to advanced AI systems.
Researchers questioned whether restricting access would improve safety or make the technology harder to study and understand. European officials pointed to the episode as a reminder of the need for greater technological sovereignty. Regulators focused on safeguards and potential misuse.
Each group was looking at the same technology. Each of them was worried about something different.
For much of the AI boom, capability was the industry’s organising principle. Companies competed to build better models. Investors focused on adoption, while users focused on utility. Those priorities have not disappeared. But as AI systems become more capable, they appear to be attracting a broader set of questions.
How should they be tested? Who should have access to them? What safeguards are sufficient? How should vulnerabilities be handled when they are discovered?
There are no settled answers as of now.
What the Anthropic episode suggests is that progress alone may no longer be enough to define the conversation. The company built a more capable model. That was supposed to be the achievement. Instead, much of the discussion that followed focused on everything that capability made possible, including outcomes that different groups viewed very differently.
Markets are still trying to understand what this means for the future of AI. The technology continues to evolve rapidly and there is little agreement on where the appropriate balance between innovation, access and safety should sit. Yet the events of the past week offer a useful reminder. The hardest questions in technology do not always emerge before a breakthrough. Sometimes they emerge because of it.
The Price of Trust
Coming back to India, the Reserve Bank of India this week tightened norms governing the sale of financial products by banks and other regulated entities. The new framework prohibits the compulsory bundling of third-party products with a lender’s own offerings and makes regulated entities liable to compensate customers in cases of mis-selling.
Here’s why the RBI came up with the new rules.
Most people assume that advice and sales are different things. One is meant to help you make a decision. The other is meant to persuade you to make one. Modern finance increasingly blurs the distinction.
A customer walks into a bank branch for a home loan and leaves with an insurance policy. A relationship manager recommends an investment product. A depositor is introduced to a wealth-management offering.
These interactions often feel like advice because they are delivered through institutions people trust.
The RBI’s new rules suggest it is paying closer attention to where advice ends and selling begins.
On the surface, these appear to be compliance changes. In reality, they address a tension that has become increasingly important across financial services.
Banks were once primarily in the business of taking deposits and making loans. Over time, many evolved into distribution platforms for insurance policies, mutual funds and a growing range of financial products. That expansion created new revenue opportunities, but it also introduced a new set of incentives.
The same institution advising a customer could also benefit from selling a particular product.
Most of the time, that may not create a problem. Occasionally, it does.
The RBI’s new guidelines directly target some of the situations where those interests can diverge. Banks can no longer compel customers to purchase third-party products alongside their own offerings. If an insurance policy is required as a risk-mitigation measure, customers must be allowed to buy it from a provider of their choice.
The regulator has also prohibited banks from financing the purchase of their own products or third-party products through customer loans without explicit consent. Employees are not permitted to receive direct or indirect incentives from third-party providers. Mis-selling has been formally defined to include selling products without consent, providing incomplete information or offering misleading information.
Taken together, the rules reflect a simple principle. Customers should know when they are receiving advice, when they are being sold a product and when the two overlap.
That distinction matters because financial products are often purchased infrequently and understood imperfectly. Unlike everyday consumer goods, the consequences of a poor decision may not become apparent for years.
The RBI’s latest intervention is not an attempt to prevent banks from selling financial products. It is an acknowledgement that advice and sales increasingly occupy the same space.
And when that happens, trust becomes more than a virtue. It becomes a safeguard.
Market wrap
India’s benchmark stock market indexes logged gains this week despite a fall on Friday, as optimism related to the US-Iran peace deal offset weakness in IT companies after a muted outlook by Accenture.
Both the Nifty 50 and Sensex gained about 1.7% each this week. Small-caps and mid-caps climbed 3.2% and 2.9%, respectively, while 15 of the 16 major sectors advanced.
The IT index dropped to a three-year low, dragged down by Accenture’s commentary that clients remain highly cautious. Infosys lost 5.8% while TCS and Tech Mahindra slipped more than 1% each.
Tata Motors Passenger Vehicles was the top Nifty loser, plunging 7.8% after its luxury unit JLR’s guidance for fiscal 2026-27 disappointed investors.
Cipla, Hindalco, Kotak Mahindra Bank and JSW Steel were among the other laggards.
Tata Group’s Trent was the top performer. It zoomed more than 16% on a positive earnings outlook. Zomato parent Eternal and Max Healthcare jumped over 8% each while InterGlobe Aviation and HDFC Life climbed 6.6% each. Titan, SBI Life and Bharat Electronics gained over 5% each.
Heavyweights Reliance Industries, HDFC Bank, Bharti Airtel and ICICI Bank also clocked gains this week.
Other Headlines
- French cosmetics group L’Oreal to buy majority stake in Indian beauty startup Innovist
- US Supreme Court rejects TCS challenge to $168 million award in trade secrets case
- HCLTech to buy 10.5% stake in Sarvam AI for $150.7 million, valuing startup at $1.5 billion
- Wipro opens AI center for Anthropic’s Claude in Bengaluru
- Apple Inc supplier Jabil, Adani Enterprises to build AI data centre infra platform
- India’s May wholesale price inflation rises to 9.68% as fuel turns costlier
- Razorpay confidentially files papers for $600 million IPO
- SEBI proposes changes to ETF base price, price band rules
- SEBI proposes new risk curbs, wider funding option for margin trading
- HDFC Bank to extend interim chairman Keki Mistry’s tenure for three months
- Tata Motors to increase commercial vehicle prices by up to 2.5% from July
- India-UK free trade deal to start in July after reassurance on steel tariffs
- India and EU to formally sign free trade deal by end-2026, says EU chief
- Tata-owned Bigbasket names former Amazon veteran Amit Nanda as CEO
- Govt raises taxes on diesel and jet fuel exports, leaves petrol duty unchanged
That’s all for this week. Until next week, happy investing!
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