National Stock Exchange of India IPO: India's Largest Exchange Lists via a Rs 22,569 Crore OFS - Should You Subscribe?

At a Glance

Kotak Mahindra Capital Co Ltd is the book running lead manager and MUFG Intime India Pvt Ltd is the registrar of the issue.

Company and its Business Operations

National Stock Exchange (NSE) of India Limited was incorporated on November 27, 1992 as a public limited company and is headquartered at Bandra Kurla Complex, Mumbai, Maharashtra. It has been India's largest stock exchange by cash market and equity derivatives turnover since Fiscal 2001, with a 92.99 per cent cash market share in FY26. Its vertically integrated platform spans trading, clearing, Nifty indices, data, listing and colocation. Customers are trading members; the top ten, contributed 46.78 per cent of FY26 revenue. The footprint covers 1,328 trading members, 3,005 listed entities and NSEIX at GIFT City. Unique registered investors grew at a 26.23 per cent CAGR from 3.09 crore (March 2020) to 13.24 crore (June 2026).

Industry Outlook

India's capital markets have deepened rapidly with demat accounts rose from 5.51 crore (March 2021) to 22.45 crore (March 2026), a 32.43 per cent CAGR, while Mutual Fund AUM compounded at 18.60 per cent to Rs 73.73 trillion, according to the Redseer Report. The TAM, India's cash market turnover, is projected to rise from Rs 280.26 trillion in FY26 to Rs 473-507 trillion by FY30P, a 14-16 per cent CAGR; equity futures turnover should reach Rs 715-765 trillion (16-18 per cent CAGR). Globally, NSE handles 51.18 per cent of equity derivative contracts. Drivers include market capitalisation-to-GDP of 119.38 per cent versus 224.04 per cent in the US, free float of around 50 per cent, and passive fund AUM projected at Rs 23-27 trillion by 2030.

Objects of the Issue

• 100 per cent Offer for Sale of 12,64,36,650 shares aggregating Rs 22,568.94 crore; no Fresh Issue.
• Selling shareholders (all Corporate; no identifiable promoter): State Bank of India (1,59,69,410), Canada Pension Plan Investment Board (1,18,74,060), Aranda Investments (1,12,46,336), MS Strategic (1,10,00,000), New India Assurance (1,05,00,000); 18 others offer 6,58,46,844 shares.

SWOT Analysis

Strengths

• Near-monopoly: 99.79 per cent equity futures share in FY26.
• Zero debt; treasury investments of Rs 64,771.28 crore.
• Operating EBITDA margin of 66.85 per cent versus BSE's 64.00 per cent.

Weaknesses

• Options contribute 60.22 per cent of revenue.
• FY26 revenue fell 3.15 per cent; profit fell 15.47 per cent.
• CFO swung to Rs 4,091.49 crore in FY25 on member margin flows.

Opportunities

• Cash market TAM compounding at 14-16 per cent to FY30P.
• Colocation racks doubled to 1,868 (FY24 to June 2026).
• Nifty indices anchor 72.59 per cent of passive fund AUM.

Threats

• Options premium share fell from 96.86 per cent (FY24) to 68.48 per cent (June 2026).
• STT on options raised to 0.15 per cent from April 1, 2026.
• SEBI settlement fees of Rs 1,431.56 crore in FY26.

Financial Performance

All figures in Rs crore. Margins in per cent. Source: RHP (Restated Consolidated Financials).

(a) Profit & Loss

 
(b) Balance Sheet

(c) Working Capital & Cash Flow

Peer Comparison

Outlook & Relative Valuation

Apply. At the upper price band, NSE is valued at 42.89x FY26 earnings, around 21 per cent below BSE’s 48x, its sole listed peer. The company also has a strong profitability profile, with an Operating EBITDA margin of 66.85 per cent and RoNW of 33.21 per cent. Its near-monopoly position in the cash and equity futures segments, debt-free balance sheet and recovery in revenue growth provide a supportive backdrop. However, the high dependence on options revenue, changing regulatory norms and the possibility of higher transaction costs remain key risks. As the IPO is entirely an OFS, the proceeds will go to selling shareholders, with no fresh capital being raised by the company. At the upper band, the post-issue P/E remains broadly unchanged at 42.88x. Considering the company’s strong market position, profitability and the valuation discount to BSE, we recommend investors to Apply for listing gains, while keeping expectations realistic given the possibility of volatility around listing.