(Bloomberg) — National Stock Exchange of India Ltd.’s long-awaited initial public offering starts taking orders Thursday, testing investor appetite for a valuation that remains rich compared with some of the world’s biggest listed exchanges.
The shares are being offered at 1,700 rupees to 1,785 rupees a share and will close for subscription on Sept. 21. NSE reduced the number of shares on offer to 126.44 million from 148.9 million planned earlier, according to its updated prospectus. The offering is entirely a sale by existing shareholders, meaning the exchange won’t receive any of the proceeds.
At the top end of the range, the deal is set to raise 226 billion rupees ($2.4 billion), the second-most ever for an IPO in the country behind Hyundai Motor India Ltd.’s 2024 listing, which netted 279 billion rupees. That price would value NSE at about 42.9 times its earnings for the year ended March. While that’s a discount to domestic rival BSE Ltd., it’s well above the roughly 24 to 25 times ratio for some of the world’s largest listed exchanges.
The premium reflects NSE’s dominant position in one of the world’s fastest-growing capital markets and its high profitability. The exchange reported net income of 103 billion rupees on revenue of 166 billion rupees in the year ended March 2026, according to its prospectus, translating into a profit margin of about 62%, above most large global peers.
“NSE is well positioned to benefit from structural tailwinds and remains the best franchise among peers” because of India’s deepening capital markets and rising global investor participation, SBICAPS Securities said in a note to clients.
Still, analysts and investors are divided over whether NSE’s market dominance and growth prospects justify the premium. NSE’s gray-market premium has fallen to about 160 rupees a share from as high as 285 rupees on Sept. 7, according to ipowatch.in.
“While the long-term growth opportunity in India’s capital markets remains favorable, the sustainability of earnings growth will depend on trading activity, regulatory stability and continued market participation,” Religare Broking said in a note to clients as it initiated the stock with a neutral recommendation.
One of the biggest risks is tighter regulatory scrutiny of speculative derivatives trading, a business central to NSE’s profitability. Options trading accounted for about 60% of operating revenue in the year ended March, leaving the exchange exposed to measures aimed at curbing activity in the segment.
NSE first filed for an IPO in 2016, but its listing was delayed by corporate-governance concerns and a co-location controversy, in which some brokers were alleged to have received preferential access to the exchange’s trading systems. The exchange recently settled the cases by paying 14.91 billion rupees.
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