After nearly a decade of trying, India's largest stock exchange is finally coming to market. NSE is one of the most profitable companies in the country, a near-monopoly with margins most businesses can only dream of. The surprising part is not that it is listing. It is the price. Here is how I read it.
Where the IPO stands
This is a confirmed, imminent IPO, not the on-again-off-again saga of the past ten years. The price band is ₹1,700 to ₹1,785 per share, the subscription window is 17 to 21 September 2026, and the stock is expected to list around 24 September on the BSE (an exchange cannot list on itself). The issue is about ₹22,570 crore at the top of the band, which makes it one of the largest IPOs India has ever seen.
One important point up front: this is 100% an offer for sale. Existing shareholders, including SBI, LIC and other institutions, are selling roughly 5.5% of the company. NSE itself raises no fresh capital. At ₹1,785, the implied market value is about ₹4.42 lakh crore.
What NSE does
NSE runs the market. It is India's largest stock exchange and, by number of contracts, the world's largest derivatives exchange. It makes money mainly from transaction fees on trading, and the single biggest slice of that comes from equity derivatives, especially index options. On top of that it earns listing fees, market-data sales, technology and colocation income, index licensing through the Nifty franchise, and clearing income.
The scale is hard to overstate. NSE handles about 93% of India's cash-equity turnover, leaving BSE with roughly 7%. In derivatives it has long been dominant, though this is now the contested battleground. On options premium, the number that actually drives revenue, NSE holds around 66% and BSE around 34%, and BSE has been gaining ground with its Sensex options.
Financials
| ₹ Cr | FY24 | FY25 | FY26 |
|---|---|---|---|
| Total income | ~16,400 | 19,177 | 18,713 |
| Net profit (PAT) | ~8,300 | 12,188 | 10,302 |
| EBITDA margin | ~75% | ~75% | ~75% |
| Return on equity | ~37% | ~37% | ~33% |
FY25 was a blockbuster, with profit up about 47%. FY26 profit then fell about 15%, and it is important not to misread that as the business breaking down. The dip was driven largely by one-off items, chiefly a ₹1,432 crore SEBI settlement charge, plus the loss of some discontinued-operations income and a genuine but smaller hit from lower derivatives volumes. Stripped of the one-offs, normalised profit was around ₹11,500 crore. The underlying franchise still earns roughly 75% EBITDA margins and a 33% return on equity, and it pays a large dividend (₹35 a share). There are very few businesses in India this profitable.
Valuation, and the unusual part
Here is what makes NSE stand out from the other IPOs of this season. At ₹1,785, the market cap of about ₹4.42 lakh crore works out to roughly 43x FY26 reported profit, or about 38x on normalised profit.
Now compare two things. First, NSE shares trade in the unlisted market at around ₹2,040, which implies a value closer to ₹5.0 lakh crore and a P/E near 49x. So the IPO is priced at a clear discount to where the stock already changes hands privately, a deliberate move to leave something on the table for new investors. Second, and more striking, smaller rival BSE trades at about 52x earnings. So the dominant market leader is being offered at a lower multiple than its much smaller listed competitor. That is unusual, and it is the heart of the valuation case.
NSE versus BSE
| Metric (FY26) | NSE | BSE |
|---|---|---|
| Total income | ~₹18,713 cr | ₹5,148 cr |
| Net profit | ₹10,302 cr | ₹2,487 cr |
| PAT growth | -15% (one-offs) | +88% |
| EBITDA margin | ~75% | ~48% |
| P/E | ~43x (IPO) | ~52x |
| Market cap | ~₹4.42 lakh cr (IPO) | ~₹1.32 lakh cr |
| Cash-equity share | ~93% | ~7% |
| Options premium share | ~66% | ~34% (rising) |
The picture is clear. NSE is about four times BSE's size on both revenue and profit, with far higher margins and near-total dominance of the cash market, yet it is coming public at a cheaper multiple. What BSE has going for it is momentum. Its profit grew about 88% in FY26 and it has been the share-gainer in Sensex options, while NSE's growth is currently flat to down because of regulation. So the trade-off is quality and scale at a discount (NSE) versus faster recent growth at a premium (BSE).
The one thing that matters most: F&O regulation
If you understand one risk here, make it this one. NSE's biggest earner is equity derivatives, and that is precisely what SEBI has been trying to cool. From November 2024 onwards, the regulator brought in a series of curbs to reduce retail speculation in options: bigger contract sizes, only one weekly expiry per exchange, upfront collection of premium, and tighter position monitoring.
The effect was real. Index-options notional volumes fell sharply after the rules came in, and small-investor participation dropped by roughly half. Because derivatives are NSE's largest revenue line, this is exactly why FY26 revenue was flat to down. Any investor buying NSE is, in part, taking a view on whether these curbs are a one-time reset or the start of a longer squeeze on the most profitable part of the business.
Red flags
- Derivatives dependence into a regulatory headwind. The bulk of revenue rides on equity-derivative volumes that SEBI is actively curbing. A regulator-driven hit to your number-one revenue line is a serious dependency, and it is already showing in the numbers.
- Governance history. NSE carries a well-documented past failure at the very top. A former chief executive, Chitra Ramkrishna, was found to have shared confidential information with an unidentified "Himalayan yogi," later linked to a senior executive appointed with no capital-market experience. Both were arrested in 2022. It is resolved, but it is a real mark on the record.
- The co-location case. The decade-long delay came from allegations that some brokers got faster server access years ago. NSE settled with SEBI (about ₹1,388 crore, on top of an earlier settlement), which cleared the path to list, but it remains a reputational marker.
Amber flags
- 100% offer for sale. The company raises no fresh capital, and some sellers are trimming stakes. There is no growth-capital story here, only a change of ownership.
- Fee and pricing regulation. SEBI can review the fees that drive NSE's margins, and any cap would hit profitability directly.
- BSE competition. BSE is chipping away at the derivatives pool, which is the segment that matters most for revenue.
- Public-shareholding overhang. Only about 5.5% is being floated, so NSE will have to sell more later to meet minimum public-shareholding rules, which means future supply of shares.
- Operational and cyber risk. As systemically critical infrastructure, any major outage carries regulatory and reputational costs.
The structural tailwind
Set against the F&O headwind is a powerful long-term story. India's investing base keeps widening. Demat accounts are now well over 200 million, monthly SIP flows are at record highs of around ₹31,000 to ₹32,000 crore, and younger investors are a rising share of the market. Penetration is still low relative to the population, so the runway is long. A rising tide of trading, listings, data and index demand lifts exchange revenue over time. NSE, sitting at the centre of all of it, is the purest way to own that trend.
My verdict
This is a different kind of decision from the other IPOs I have written about recently. Rentomojo and Karamtara were good businesses at rich prices. NSE is arguably a great business at a reasonable one. You are buying a near-monopoly with 75% margins and a 33% return on equity, at a discount to both its own unlisted price and to smaller listed BSE. For a company that essentially owns India's trading infrastructure, that is an attractive starting point.
The honest counterweight is that it is 100% an offer for sale, its most important revenue line is under active regulatory pressure, and its governance past is not spotless. So this is not a flawless story.
Where do I land? Of the recent listings, NSE is the one I find most worth owning for the long term, as a way to hold a piece of India's market growth, provided you size it sensibly and go in with clear eyes on the derivatives-regulation risk. The discount to the unlisted price also suggests the market expects a listing pop, but the real reason to own NSE is the franchise, not the first-day trade. If SEBI's F&O curbs settle rather than tighten further, today's price will likely look reasonable in hindsight.
Bottom line: a dominant, extremely profitable franchise, priced below its smaller rival, with a real regulatory cloud over its biggest business. The best quality on offer this season, as long as you respect the F&O risk.
Educational purposes only, not investment advice. DYOR.
Sources: NSE DRHP and RHP and IPO disclosures (price band, offer structure, FY24 to FY26 financials, risk factors); SEBI settlement and F&O regulation notifications; Business Standard, Business Today, Economic Times, Moneycontrol and Reuters reporting on the IPO, the co-location settlement and derivatives curbs; BSE, MCX and CDSL financials for comparison; unlisted-share platforms for the grey-market price (as of 8 to 11 September 2026). The final issue price is set after the 17 to 21 September book-build, and standalone versus consolidated and reported versus normalised profit differ, so figures are approximate. Verify live before acting.
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