National Stock Exchange of India (NSE) IPO

The India’s Most Anticipated Listing Finally Arrives. The After nearly a decade of regulatory entanglements, governance controversies, and mounting market anticipation, the National Stock Exchange of India (NSE) filed its Draft Red Herring Prospectus (DRHP) with SEBI on June 17, 2026 — a date that will likely be recorded as a watershed moment in Indian capital-market history. The filing instantly sent shockwaves across Dalal Street: BSE shares tumbled 4.26% to ₹3,985 on June 17, touching an intraday low of ₹3,977.30, as markets processed the arrival of a formidable, soon-to-be-listed exchange rival. The “sell the news” reaction was telling — BSE had already rallied from its June 2025 all-time high of ₹3,030 to ₹4,162 purely on NSE IPO expectations. Reality, in the form of a DRHP, deflated some of that premium.

A Decade in the Making

NSE’s IPO story is less a corporate listing narrative and more a regulatory odyssey. The exchange first initiated its listing process in late 2016, only to be derailed by the co-location scandal a controversy involving alleged unfair access to trading systems that drew SEBI enforcement action and intense governance scrutiny. The turnaround began taking shape in January 2026, when SEBI issued its long-awaited No Objection Certificate (NOC) on January 30. NSE’s board formally approved the IPO on February 6, 2026. A writ petition filed in the Delhi High Court challenging the NOC was dismissed in February, removing the final legal hurdle. NSE then asked its bankers to target the June 5–15 window for DRHP filing, successfully submitting the document based on March 2026 quarter financials — keeping alive its stated goal of a listing before December 2026, most likely on BSE (regulations prohibit an exchange from listing on its own platform).

The Offer Structure: Pure OFS, No Fresh Capital

The IPO is structured entirely as an Offer for Sale (OFS) of up to 148,905,525 equity shares of face value ₹1 each — representing approximately 6% of NSE’s paid-up capital — with zero fresh equity issuance. NSE itself receives no proceeds; all capital flows exclusively to exiting shareholders. The transaction is expected to raise ₹21,000–₹25,000 crore, which would rank it among the largest OFS transactions in Indian IPO history.

The top selling shareholders tell an instructive institutional story. State Bank of India is the largest seller, offloading up to 2.475 crore shares at a weighted average cost of acquisition (WACA) of just ₹0.80 per share. Bank of Baroda follows at ₹0.54, and Stock Holding Corporation of India at ₹0.46 — all founding-era investors sitting on near-infinite return multiples against an unlisted market price hovering around ₹1,935 per share. Canada Pension Plan Investment Board (CPPIB), which entered at ₹324.13, and MS Strategic (Mauritius) at ₹66.54, represent the more recent international institutional cohort with still-substantial gains. The weighted average cost of all equity shares transacted in the last one year stood at ₹1,909.02 per share, with the cap price expected to be a modest premium above that level.

Crucially, LIC, Radhakishan Damani, and Premji Invest are not participating in the OFS — a deliberate signal of continued long-term conviction in NSE’s compounding potential.

The Financial Picture: Profitable Giant, But Growth Has Stalled

The DRHP financials paint a portrait of exceptional structural profitability, though with a critical caveat on recent momentum.

NSE’s revenue from operations stood at ₹16,601 crore in FY26, up from ₹14,780 crore in FY24 — a healthy 12.3% two-year rise — but meaningfully down from ₹17,141 crore in FY25. Net profit (PAT) came in at ₹10,302 crore in FY26, down from ₹12,188 crore in FY25 (though up from ₹8,306 crore in FY24). The year-on-year profit decline is the single most important number for valuation discussion — NSE is a profit-declining incumbent in the very year it goes public, primarily due to SEBI’s late-2024 regulatory curbs restricting index options expiry frequency, which compressed derivatives volumes.

Key margin metrics highlight both the strength and the pressure:

• Operating EBITDA Margin: 66.85% (FY26) vs. 73.78% (FY25)
• Normalised Operating EBITDA Margin: 76.23% (FY26) — adjusting for one-time regulatory charges
• PAT Margin: 50.98% (FY26) vs. 55.30% (FY25)
• Return on Equity: 32.98% (FY26)
• Return on Capital Employed: 42.80% (FY26)
• Book Value per Share: ₹129.75 (post 4:1 bonus issue, November 2024)
• Basic EPS: ₹41.62 (FY26), adjusted post-bonus
• Total Borrowings: Nil — NSE carries zero debt
• Treasury Investments: ₹64,771 crore — an enormous and largely underappreciated capital cushion
• Net Worth: ₹31,870 crore (FY26), up from ₹23,833 crore in FY24

Revenue concentration remains the defining structural risk: transaction charges contributed 78.65% of revenue from operations in FY26 (down from 82.07% in FY24, but still dominant), and within that, options trading alone drove roughly 60% of total operating revenue. NSE’s financial fortunes rise and fall almost entirely with F&O derivatives volumes a concentration that SEBI itself has been actively trying to moderate in the interest of retail investor protection.

Operational Scale: A Global Exchange Titan

Beyond the income statement, NSE’s operational metrics underscore why it is considered systemically irreplaceable in India’s financial architecture:

• Unique Registered Investors: 129.09 million as of March 2026, up sharply from 91.75 million in FY24 — a 40.7% rise in two years
• Market Capitalisation of Listed Entities: ₹411.25 trillion (approximately $4.9 trillion)
• Listed Entities on Exchange: 2,978 (Mainboard + SME combined)
• Total Fund Mobilisation in FY26: ₹20.33 trillion across equity and debt
• Mainboard IPOs facilitated in FY26: 108, up from 75 in FY24
• Total Equity Raised in FY26: ₹4.78 trillion
• Nifty Indices Maintained: 425 across equity, debt and hybrid asset classes
• Colocation Member Racks: 1,680 (full rack equivalent), up from 934 in FY24
• Daily Messages Processed: 12–14 billion as of March 31, 2026

According to the World Federation of Exchanges, NSE retained its position as the largest equity derivatives exchange globally in FY26, with over 36.99 billion contracts traded. It also ranked as the third-largest exchange globally by number of cash equity trades, and the largest in India by total cash market turnover continuously from FY2016 to FY2026.

Valuation: A Deliberate Discount to BSE?

The central investor question is valuation. At an estimated issue size of ₹22,000–₹25,000 crore against an implied total valuation of ₹4.7–₹5 lakh crore, NSE would price at roughly 35–40x trailing earnings, compared with BSE’s current market multiple of approximately 65x. That is a striking discount for an exchange that generates roughly 3.4x BSE’s revenue and 4x its net profit, and holds undisputed dominance in derivatives.

The gap is not irrational. BSE’s PAT grew roughly 88% in FY26, riding its Sensex weekly-options market-share gains it is the high-growth challenger. NSE, by contrast, saw its FY26 profit fall year-on-year, bearing the full regulatory burden of the F&O curbs. The unlisted grey market has been pricing NSE shares at around ₹1,935, implying the market already sees an eventual re-rating once volumes stabilise and growth resumes. Whether the IPO prices below, at, or above grey market levels will depend critically on SEBI’s review timeline and market conditions through the October-November festive listing window.

What Comes Next and Why It Matters

The DRHP filing starts the clock. SEBI will review the document typically a 30-day-plus process before issuing observations, after which NSE can finalise its price band, open anchor investor bidding one working day prior to the issue, and then conduct the public subscription. Under the SEBI ICDR Regulations, up to 50% of the net offer will be allocated to Qualified Institutional Buyers, at least 15% to Non-Institutional Bidders, and at least 35% to Retail Individual Bidders.

The NSE IPO is more than a transaction. With 129 million registered investors on NSE’s own platforms, the listing will represent a unique moment of circularity — the very investors who trade on NSE will now have the option to own it. India already stands as the world’s fourth-largest equity market, with NSE at its core. When NSE itself lists, the exchange that built that market becomes the market. That is the most compelling narrative of India’s most anticipated IPO.