The Securities and Exchange Board of India (SEBI) has issued observations on the National Stock Exchange’s (NSE) draft papers for its initial public offering (IPO) and now awaits a response from the exchange’s lead managers, according to a report.

Business Line reported that SEBI issued its observations on NSE’s draft papers as the exchange moves closer to its long-awaited public listing.

NSE and its appointed merchant bankers will now respond to the regulator’s observations before SEBI takes a final decision on the IPO proposal, the report added.

The development comes a day after SEBI Chairman Tuhin Kanta Pandey said the regulator was close to approving NSE’s draft papers, signalling further progress in an IPO process that has faced delays for nearly a decade.

NSE filed its draft red herring prospectus (DRHP) with SEBI in June. The proposed offer-for-sale (OFS) covers up to 148.9 million equity shares, each with a face value of Re 1.

The proposed share sale represents around 6 per cent of NSE’s paid-up capital. The IPO does not include a fresh issue of shares, meaning the selling shareholders will receive all proceeds from the offering.

NSE has pursued a public listing for years but regulatory concerns, including matters linked to the co-location and dark fibre cases, delayed its plans.

The listing proposal gained momentum earlier this year after NSE received a no-objection certificate from SEBI. Following the regulatory clearance, the NSE board approved the IPO plan.

Last month, SEBI in-principle agreed to settle applications filed by NSE in connection with the co-location and dark fibre matters for Rs 1,491.21 crore.

According to the report, the unlisted market currently values NSE at around Rs 5 lakh crore.

Meanwhile, reports indicate that NSE is exploring the ‘Permitted to Trade’ (PTT) route. The mechanism could allow investors to trade NSE shares on the exchange even as the company remains formally listed on the BSE.

NSE’s IPO would rank among India’s most closely watched market listings. Investors are tracking the regulatory process closely as the exchange moves towards a potential public debut after years.