The National Stock Exchange of India (NSE), which is still awaiting regulatory approval for its initial public offering (IPO), is now planning to streamline the process of buying the unlisted stocks of the company, thereby reducing the time taken for such deals from about four months to just a week, stated a report by Business Standard.
The market daily informed that the management of India’s biggest stock exchange has affirmed that it is working to reduce the time taken. Analysts told BS that certain approvals are required at present from NSE for buying stocks, which is adding to the processing time.
Although industry players dealing in the unlisted space don't expect the streamlining to be effective within the next three months, they expect the move to lift demand and reduce the lot size for the exchange’s shares, the report pointed out.
“If the transfer time reduces to a week, it will further boost investor interest, lower the brokerage price spread and lot sizes, and raise volumes,” Manish Khanna, cofounder, Unlisted Assets, was quoted as saying.
Analysts also told BS that the bourse is working on reducing the time taken in the Know-Your-Customer (KYC) process needed for the transfer. At present, there are two phases of approval to buy NSE shares—the first is KYC and the second is approval for processing the transfer of shares, it said.
In cases where the buyer bought the shares in the past, there is no requirement for the KYC stage again. The first stage may take up nearly two months while a fortnight or a month is taken for the second phase, informed BS.
“There has been significant activity in the shares of NSE between March 2023 and early May 2023. Post announcement of dividends and better-than-expected results has boosted the demand for NSE shares and we are seeing that investors are in the 'wait and watch' mode, not just because of the anticipation of an IPO, but also due to the rise in interest in the exchange shares as the concerns around volumes and market share subside slowly,” Khanna was quoted as saying.
