National Stock Exchange of India Limited (Subscribe)

Highlights

National Stock Exchange of India Limited (NSEIL) incorporated in 1992, is India’s largest stock exchange and one of the world’s leading multi-asset exchange platforms. NSE provides a vertically integrated ecosystem comprising trading, clearing, settlement, listing, market data, index services, and regulatory oversight across multiple asset classes cash market, futures, options, mutual funds, commodity derivatives, exchange-traded currency derivatives, wholesale debt market and interest rate futures.

NSEIL acts as a first-level regulator, ensuring fair, transparent and unrestricted market access. It uses real-time surveillance and compliance mechanisms to detect and prevent market manipulation, insider trading, while working with regulators to strengthen market governance and investor protection. This supports market discipline, stability and investor confidence.

NSEIL served 263.36 mn registered investor account, 1,328 trading members, 132.37 mn Unique Registered Investors and 3,008 Listed Entities across over 99 pct of Indian postal codes, and facilitated trading of 3,270 entities including companies, trusts, government securities, bonds among others and entities that are permitted to trade.

Out of the total proceeds of Rs. 226 bn, comprising entirely an offer for sale with no fresh issue component, the full Rs. 226 bn will accrue to the corporate selling shareholders of the company.

Key Highlights           

• Indian cash market turnover has grown six-fold over FY16-26 to Rs. 280 trillion and is projected to reach Rs. 473-507 trillion by FY30 at 14-16 pct CAGR. Within Equity Derivative, Equity futures turnover stood at Rs. 395 trillion in FY26 and is projected to grow at 16-19 pct CAGR to Rs.715-765 trillion by FY30, while equity options premium turnover is expected to grow from Rs, 190.65 trillion to Rs.269-289 trillion over same period at 9-11 pct CAGR. NSEIL ranks among the leading global exchanges, with 11.38 pct market share in cash equity trades and 51.18 pct in equity derivatives contracts.

• NSEIL pioneered fully automated, screen-based electronic trading through its NEAT platform, enabling anonymous, order-driven trading that reduced manual intervention and information asymmetry while enhancing market accessibility and transparency. This pioneering technology has positioned NSEIL as the market leader across key asset classes, commanding market shares of 93.05 pct in the cash market and 99.72 pct in equity futures based on total turnover, and 68.48 pct in equity options based on premium turnover.
• Over three decades, NSEIL has evolved from a technology-driven trading platform into a key capital-market institution, enabling various stakeholders with access to capital. Its strong market position is supported by transparent price discovery, robust clearing and settlement, supervision and governance, along with capabilities across commodities and international markets at GIFT City. Its scalable, asset-light technology model enables new products at low marginal cost, supporting further expansion.
• NSEIL earns revenue through diversified income streams, with transaction charges on trades executed across segments being the largest, supplemented by listing fees from listing entities, colocation and connectivity charges, data feed and terminal service fees, clearing & settlement fees, licensing and index subscription fees.
• NSEIL’s infrastructure comprises fault-tolerant servers with inbuilt redundancy and commodity servers to ensure continuous, uninterrupted trading operations through seven data centres, including a Primary Data Centre (PDC) and member colocation centre. The PDC is backed by a fully mirrored Disaster Recovery (DR) site for quick switchover, with live operations conducted from the DR site twice yearly along with regular mock drills, while a Near Data Centre (NDR) ensures real-time data replication targeting near-zero data loss.
• NSEIL operates listing platforms across the Mainboard, the SME board through EMERGE and Social Stock Exchange (SSE), while also pioneered electronic platforms for debt instruments. It ranks among the leading global exchange groups in IPO capital raised and new listings, while also playing a significant role in debt fundraising, municipal bond listings and passive fund markets through index funds and ETFs linked to its benchmark indices.
• NSEIL’s international strategy runs on two fronts. At GIFT City, it has already built out NSEIX and NSEICC, offering cross-border derivatives and expanded product access, while NSEIX Global Access IFSC Limited lets Indian residents, NRIs and other eligible investors trade global markets through a dedicated digital platform. Building on this base, NSEIL now plans an offshore presence to deepen engagement with global institutional investors, supporting onboarding, tailored market access and expansion into index and data services such as customised and ESG linked indices, reinforcing its international competitiveness.

• NSEIL’s key growth strategies include (i) To continue acting as a catalyst for new capital formation across asset classes and attract new issuers and investors, (ii) provide transparent, orderly and fair market access to foster investor confidence and sustainable capital market growth, (iii) invest in technology infrastructure and modernisation, (iv) drive market innovation and business diversification, (v) automate and organise large markets through new product launches, (vi) maintain stakeholder trust and foster responsible investing and financial inclusion, (vii) forging global partnerships and expanding presence in GIFT City’s International Financial Services Centre, (viii) enhance data monetisation through its comprehensive market data ecosystem, and (ix) build a strategic offshore presence to harness global opportunities.
• The sales of the company have grown by 5.98 pct CAGR over FY24-26 and EBITDA/profit has grown 6.04 pct CAGR/5.39 pct CAGR over same year. In FY26 the company reported sales of Rs. 1,66,013 fell by 3.15 pct YoY. EBITDA of the company fell 12.25 pct YoY to Rs. 1,10,979 mn. In FY26 the company posted profit of Rs. 1,04,744 mn, which decreased by 13.44 pct YoY. In Q1FY27, NSE’s sales/EBITDA/profit grew 13.1 pct YoY/14.85 pct YoY/15.17 pct YoY.

Key Risk

• SEBI measures to strengthen the equity index-derivatives framework can lower derivative trading volumes, which would significantly affect the company’s largest revenue stream.
• NSEIL’s business requires it to acquire, store and transmit sensitive information, exposing it to risks of security breaches.
• NSEIL’s ability to attract new listings, issuances and capital formation activities on its platforms is critical to its business, and any decline may adversely affect its operations.

Financial Performance

Source: – RHP.

Peer Comparison based on FY26 Financials.

Source: – RHP.

Valuation

NSE maintains a leading market share positions in India across key asset classes, with market share of 93.05 pct, in cash market (based on total turnover), 99.72 pct, in equity futures (based on total turnover), 68.48 pct, in equity options (based on premium turnover), 100 pct, in exchange-traded currency futures (based on total turnover) and exchange-traded currency options (based on total premium turnover). At the upper end of the price band of Rs. 1785, the issue is priced at an PE of 42.2x its FY26 post issue capital. The issue appears to be fairly priced. India’s rapid economic expansion, rising per capita incomes and accelerating financialisation of savings are converging to create a generational opportunity for capital market infrastructure. As individual and institutional participation deepens, supported by digital penetration, regulatory reforms and a maturing investor base, trading volumes, market liquidity and product demand are expected to continue to grow. Each new participant strengthens NSE’s liquidity pool, which in turn attracts further investors, issuers and intermediaries, generating powerful and self-reinforcing network effects. These dynamics, combined with expanding product suite, index ecosystem and post-trade infrastructure, positions NSE to capture a growing share of India’s capital markets growth over the long term. Hence, one can subscribe this issue from a longer term perspective.

Disclaimer: The views shared in blogs are based on personal opinions and do not reflect the company’s views. Investment involves risk, and it is advisable to consult a financial advisor before making any investment through the app. The decision to invest is solely that of the investor, and the company or its communication cannot be held responsible for it.