After nearly a decade of waiting, NSE is finally set to hit the public markets. The exchange has received SEBI approval, and its IPO will open for subscription on September 17.
NSE will raise ₹22,562 crore through its IPO, which will be an entirely offer-for-sale (OFS). This makes it India's second-largest IPO, after Hyundai Motor India's ₹27,870 crore issue in 2024.
But the IPO size is not the most important part of the story. For investors, the bigger question is whether NSE's dominant market position, strong profitability, and long-term growth potential justify the valuation at which its shares are priced in the public market.
#NSE IPO: Key Details
The NSE IPO will be an entirely OFS. The exchange itself will not receive any of the IPO proceeds. Existing shareholders will sell up to 12.64 crore shares, representing roughly 5.1% of NSE's paid-up capital.
The shares will be listed on the BSE rather than the NSE, as the NSE cannot provide a trading platform for its own listed shares.
#What Does NSE Do?
NSE is India's largest stock exchange by trading activity and operates across several segments of the capital markets ecosystem. Its businesses include:
- Equity cash-market trading
- Equity futures and options
- Currency derivatives
- Debt markets
- Listing services
- Market data and analytics
- Index licensing
- Data-centre and connectivity services
- Clearing and settlement-related services
However, NSE is not equally exposed to all these businesses. The biggest driver of its earnings is transaction revenue, and within transaction charges, equity options dominate. That distinction is critical to understanding the IPO.
#NSE's Biggest Moat Is Liquidity
NSE dominates the country's securities transaction market. In FY26, NSE accounted for around 93% of India's cash-equity turnover, 99.8% of equity futures turnover, and about 74.7% of equity options-based premium turnover. It has also remained the world's largest equity derivatives exchange by the number of contracts traded for several consecutive years.
#Market Share of NSE in Capital Market Ecosystem
#Source: NSE DRHP
This dominance creates a powerful network effect. More traders create greater liquidity. Greater liquidity attracts more traders. That further improves liquidity and makes it difficult for a competing exchange to take meaningful market share. This is one of the biggest reasons why NSE deserves a premium valuation.
#How Does NSE Make Money
NSE's revenue model is heavily dependent on transaction activity. In FY26, revenue from operations stood at ₹16,601 crore. Transaction charges contributed ₹13,057 crore, or 78.65% of operating revenue.
But there is an even more important detail. Of the ₹13,057 crore earned from transaction charges, around ₹9,997 crore came from equity options. That means equity options accounted for 60.22% of NSE's revenue from operations. And ₹1,480 crore, or 8.92% of revenue from operations, came from the futures business.
This is both a strength and a risk. NSE has an extraordinary position in India's derivatives market. But it also means the company's earnings are exposed to regulatory changes affecting equity derivatives. That is probably the single most important risk investors need to understand before applying for the IPO.
#NSE Financial Performance
NSE has built a highly profitable business, but FY26 was not a year of uninterrupted growth.
#Source: NSE DRHP
Revenue from operations has increased between FY24 and FY26, but declined 3.1% YoY in FY26. PAT fell 15.5% from ₹12,188 crore in FY25 to ₹10,302 crore. The decline reflected softer trading activity, particularly in derivatives, as well as changes in the regulatory environment.
Transaction-charge revenue fell 4% to ₹13,057 crore in FY26, while clearing and settlement income declined 22% to ₹251 crore.
The numbers therefore tell investors two different stories. The long-term story is strong. NSE has built a dominant franchise with extraordinary profitability.
The near-term story is less straightforward. Its largest revenue engine is highly sensitive to derivatives activity and regulation.
#The F&O Question Investors Cannot Ignore
For NSE investors, the biggest question is not whether derivatives will continue growing. It is how much of that growth can be monetised by NSE under India's evolving regulatory framework.
SEBI has introduced several measures affecting equity derivatives, including changes to expiry structures, contract sizes and other trading requirements. These regulatory changes, along with other market factors, have affected derivatives trading activity.
NSE's FY26 average daily trading volume in the cash market declined by 6.6%, while equity futures ADTV fell by 14.2%.
NSE's dominant position in derivatives creates an unusual investment proposition. Despite having a competitive moat, its biggest source of revenue is also its biggest regulatory risk.
#NSE IPO Valuation: The Number That Matters
The NSE IPO price band is fixed at ₹1,700-₹1,785.
The OFS brings 12.64 crore shares to the market. At the upper end of the price band (₹1,785), that translates into an issue size of roughly ₹22,562 crore, making it the second-largest IPO in Indian history after Hyundai Motor India's ₹27,870-crore issue in 2024.
At the upper price band, NSE's implied market capitalisation works out to around ₹4.42 lakh crore. Against its FY26 profit of ₹10,302 crore, this translates into a price-to-earnings (P/E) multiple of roughly 43x.
For context, As of September 11, BSE trades at around 46x trailing earnings. On this basis, NSE's IPO valuation of roughly 43x FY26 earnings does not look particularly aggressive relative to its listed peer.
#NSE vs BSE: A Peer Comparison
For NSE investors, BSE is the most relevant listed peer. But comparing the two only on revenue and profit misses the bigger picture.
NSE is significantly larger and more dominant in trading, while BSE has been the faster-growing challenger, particularly in equity derivatives. The investment case therefore comes down to scale and market dominance versus growth and market-share gains.
#NSE vs BSE: Financial and Operating Comparison
Source: NSE DRHP
The scale difference is striking. NSE generated more than three times BSE's operating revenue and over four times its profit in FY26. Its cash-market trading volume was also more than 13 times that of the BSE.
#How to Apply for NSE IPO?
The NSE IPO will open for subscription on September 17. Investors can apply online through SMC using the SMC ACE App. Complete the IPO application, approve the UPI mandate or use the ASBA facility, and track your application status from a single platform.
For the latest updates on NSE IPO, NSE IPO allotment status, and other NSE IPO latest news, download the SMC ACE App from Play Store or Apple App store or visit the SMC Trade Online website. If you don't have a demat account yet, you can open one with SMC and apply for the IPO seamlessly.
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