The National Stock Exchange of India Ltd. priced its initial public offering Thursday at 1,700 to 1,785 rupees per share, targeting 226 billion rupees ($2.4 billion) at the top end. The offering closes Sept. 21.
The IPO is India's second-largest on record, behind Hyundai Motor India's 279 billion rupee listing in 2024. NSE reduced its share float to 126.44 million from 148.9 million shares planned earlier. The offering consists entirely of secondary shares from existing holders—the exchange receives no proceeds.
At the upper price band, NSE trades at 42.9 times trailing earnings, a 21 percent discount to domestic competitor BSE Ltd. (54.2x earnings) but roughly 75 percent above the 24-25x multiple common among large global exchanges. NSE reported net income of 103 billion rupees on 166 billion rupees in revenue for the year ended March, yielding a 62 percent net margin—a rare figure among peers.
But demand signals are softening. Gray-market premium fell to approximately 160 rupees per share from a high of 285 rupees on Sept. 7, a 44 percent decline in less than two weeks. SBICAPS Securities remains bullish, citing NSE's market dominance and India's deepening capital markets. Religore Broking initiated coverage with a neutral rating, acknowledging long-term structural growth but flagging execution risks.
The core vulnerability: options trading generated approximately 60 percent of NSE's operating revenue in the fiscal year ended March. Any regulatory clampdown on derivatives activity—a persistent policy concern in India—could materially compress earnings and justify the current valuation skepticism.
NSE's IPO path spanned a decade. The exchange first filed in 2016 but faced delays tied to co-location access disputes and governance lapses. It resolved related regulatory cases in 2024 by paying 14.91 billion rupees.
