If you are one of the millions of investors who started celebrating Diwali already because indexes reached new highs on September 12, 2024, here is more good news: SEBI, or Securities Exchange Bureau of India, the watchdog for stock markets, has closed the colocation case against NSE.
But why is it good news for you?
The alleged colocation scam reported in the newspapers in 2015 was one of the major obstacles to the world’s largest derivative exchange, NSE, coming out with an IPO for almost a decade. Hence, the long wait for investors like you having bought NSE unlisted shares is good news as you could sell those shares in your d-mat account to get high returns. Also, it offers opportunities for the general public to buy NSE shares at the IPO price to get high returns when they are listed on the exchanges at a high price. It is because of the mammoth potential of NSE shares with many income streams to increase thousands of crores of profit annually. With such potential, not all those subscribing for NSE shares in IPO will get it as it may get oversubscribed many times. Depending on the oversubscription, you may get only a fraction of the shares you apply for in the IPO.
Hence, buying NSE unlisted shares from a reputed broker will help you yield high returns, as SEBI has closed the biggest obstacle to the IPO.
What is the alleged colocation case against NSE?
NSE has its head office in Bombay with servers to start, control and end the trading for the day. In 2015, reports alleged that NSE was using its Colo or colocation facility, which wrongly allows TMs or trading members to have their servers for rate feeds in the NSE. A few TMs were reported to have laid fibre cables through non-empanelled ISPs or internet service providers to get earlier access to NSE data than the other TMs and make huge profits. SEBI investigated the alleged scam and imposed a disgorgement order for NSE to pay Rs—625 crores with interest and another Rs. 1,000 crores as a penalty. However, the Supreme Court of India in 2019 asked SEBI to repay NSE Rs. 300 crores as per the disgorgement order. Also, it did not stay the SAT or Securities Appellate Tribunal order striking down the disgorgement order of SEBI. And because of these proceedings from 2015, NSE could not come out with the IPO with approval from SEBI.
Will the SEBI closure of the colocation scam case pave the way for NSE IPO?
The SEBI closure of the colocation case without directions will undoubtedly enable NSE to launch an IPO, which it started last month, by reapplying for a no-objection certificate from SEBI.
The above facts are sweeter than Diwali sweets for millions of investors in India and abroad eagerly awaiting their favourite IPO, which could be groundbreaking for the stock markets soon. If you want to begin your investment journey, invest in unlisted shares. Stockify is the best platform to help you in this endeavour. The above facts will help you learn the most about NSE so you can buy its pre ipo shares from a reputed broker and reap huge profits soon. Visit Stockify to learn more about upcoming IPOs and to buy or sell them. Experts at Stockify guide investors in making the best choice.