NSE goes public: Why India’s largest stock exchange is worth more than Nasdaq

Rush ahead of the trading debut

NSE’s IPO closed with demand far exceeding supply. Over three days, investors submitted bids for 505.8 million shares, while only 88.6 million shares were on offer. The IPO was ultimately subscribed 5.7 times.

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Most of the demand came from large investors. Institutional buyers bid for 12.7 times the number of shares allocated to them. High-net-worth and other non-institutional investors subscribed 6.6 times their quota, while the retail portion was subscribed 1.4 times.

Even before the main IPO opened, NSE sold about $703 million worth of shares to anchor investors. Buyers included sovereign wealth funds from Abu Dhabi and Norway, while India’s Life Insurance Corporation of India was the largest participant.

NSE shares were offered at between $17.72 and $18.60 apiece, implying a valuation of about $46 billion. Trading is expected to begin on September 24. NSE itself will not receive any proceeds from the IPO, as all shares are being sold by existing shareholders.

Pricier than U.S. rivals

Relative to earnings, NSE is valued much more highly than its U.S. rivals. At the IPO price, the exchange is valued at about 42.9 times annual earnings, compared with around 23.6 times for Nasdaq and 21.9 times for Intercontinental Exchange.

However, the higher earnings multiple does not mean NSE has already overtaken the world’s largest exchange operators in size. For comparison, Intercontinental Exchange is valued at about $90.5 billion, Hong Kong Exchanges at $64.5 billion, and Nasdaq at $53.1 billion.

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Investors are willing to pay such a premium because of NSE’s dominant position in India. The exchange handles about 93% of the country’s cash equity trading and nearly all equity futures trading. Over the past two years, the number of registered investors on the platform has risen by about 40% to more than 129 million.

The exchange grew with the market

NSE’s growth has coincided with a sharp expansion of India’s stock market. The share of equities and mutual funds in annual household financial savings rose from 2% in 2012 to 15.2% in the financial year ended March 2025.

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The stakes held by NSE’s early investors have also surged in value. Azim Premji’s investment fund bought a 3% stake in the exchange in 2008 for about $100 million. Ahead of the IPO, that holding was valued at more than $1 billion.

Another major shareholder, Avenue Supermarts founder Radhakishan Damani, owns 39 million NSE shares. His stake was valued at about $835 million before the listing. Other major shareholders include the families of Infosys founders, investors linked to Motilal Oswal and IIFL Group, as well as entities associated with Hero Group and Haldiram.

The main risk is derivatives

NSE does have a weak spot: its dependence on derivatives trading. About 80% of the exchange’s revenue comes from trading activity, with options accounting for a significant share of that business. After tighter regulations and higher taxes, derivatives trading volumes have fallen about 27% from their 2024 peak.

That slowdown has already affected the company’s results. In the financial year ended March 2026, NSE’s operating revenue fell 3.1%, while profit dropped 15.5%. Bernstein analysts expect growth in India’s derivatives market to slow to about 5% in the 2027 financial year.

NSE is trying to reduce its dependence on derivatives. Over the past 15 months, the exchange has launched electricity and natural gas futures, electronic gold receipts, and a national coal exchange. The company hopes new products and other market segments will offset slower growth in options trading.

Despite the slowdown in its main source of income and its high valuation, demand for NSE shares was several times greater than supply. Investors are betting not only on the exchange itself, but also on the continued expansion of India’s stock market and the growing number of retail participants.

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