The National Stock Exchange (NSE) has disclosed in its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI) that a petition pending before the Bombay High Court seeks, among other reliefs, a stay on its proposed initial public offering (IPO) process and directions for greater disclosures regarding its shareholding structure.

What the Petition Demands

According to the DRHP, the petitioner has sought a writ of mandamus directing SEBI to decide a pending representation. The petition also demands that NSE disclose its promoter group, shareholders, and ultimate beneficial owners, along with know-your-customer (KYC) documents.

As quoted in the prospectus, the exchange stated: 'The Petitioner sought, among others, a writ of mandamus directing SEBI to decide the pending Representation, a direction against our Company seeking disclosure of its promoter group and shareholders/ultimate beneficiaries with KYC documents and a stay on our Company's initial public offering process until final disposal of the Petition. The matter is currently pending.'

NSE has maintained that it believes the petition is without merit and is taking appropriate legal steps in the matter.

Concerns Over Foreign Shareholding

Reports indicate that the petitioner has raised concerns regarding the beneficial ownership of certain investors in NSE and sought a regulatory examination of foreign shareholding in the exchange. The matter was reportedly first heard by the Bombay High Court on 17 June 2025 and is scheduled for its next hearing on 24 June 2025.

This comes amid heightened scrutiny of NSE's long-delayed IPO, which has been in the works for several years and is among the most anticipated market listings in India. The disclosure of this litigation in the DRHP itself signals the exchange's obligation to flag material risks to prospective investors.

Intellectual Property Risks Flagged

Beyond the pending litigation, NSE has highlighted several intellectual property risks in its IPO papers. The exchange warned that failure to adequately protect its trademarks, proprietary technology, and trade secrets could adversely affect its business, reputation, and competitive position.

Notably, some of NSE's trademarks are still awaiting registration, leaving them potentially vulnerable to infringement or misappropriation by third parties. Certain in-house technology systems are also not protected by registered patents, making them susceptible to replication by competitors.

Bombay High Court Grants Interim Relief on Fake Accounts

Separately, NSE disclosed that it had approached the Bombay High Court against unidentified persons and intermediaries for allegedly operating fake social media accounts and disseminating misleading content using the NSE trademark. The court granted interim relief in April 2026, restraining the defendants from using the NSE brand or deceptively similar marks.

The exchange further warned that misuse of its intellectual property could facilitate phishing attempts, fake trading schemes, and other financial frauds, potentially resulting in investor complaints, regulatory scrutiny, and damage to its brand value.

What Happens Next

With the Bombay High Court hearing scheduled for 24 June, the outcome could have a direct bearing on the timeline of NSE's IPO. Analysts and market observers will be watching whether the court grants any interim stay — a development that could delay one of India's most anticipated public listings. SEBI's response to the pending representation flagged in the petition will also be closely tracked.