NSE IPO: 10 key risks investors should know from the DRHP

India’s largest stock exchange, the National Stock Exchange (NSE), filed its Draft Red Herring Prospectus () with the Securities and Exchange Board of India (SEBI) on 17 June for a proposed IPO estimated at around ₹30,000 crore. Structured entirely as an Offer for Sale (), the issue is expected to become the largest IPO in Indian market history.

Ahead of the public issue, Life Insurance Corporation of India () was the largest shareholder with a 10.72% stake, holding 26.53 crore shares. Other key shareholders include Aranda Investments (Mauritius) Pte Ltd with 11.25 crore shares (4.54%), Stock Holding Corporation of India with 11 crore shares (4.44%), and SBI Capital Markets with 10.73 crore shares (4.33%).

The IPO comprises the sale of up to 14.89 crore equity shares, representing nearly 6% of NSE’s paid-up equity capital. As the issue is purely an OFS, NSE will not receive any proceeds from the offering, with all sale proceeds accruing to the existing shareholders. The price band for the issue is yet to be announced.

The offering is being managed by a consortium of 20 book-running lead managers, including Kotak Mahindra Capital, Morgan Stanley, HSBC, SBI Capital Markets, JPMorgan, Citi,, Axis Capital, JM Financial and HDFC Bank. MUFG Intime India has been appointed as the registrar to the issue.

Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP):

NSE IPO: Key Risks

1. In the fiscal years 2026, 2025, and 2024, the company generated 78.65%, 79.55%, and 82.07% of its revenue from operational activities through transaction charges, with its options segment accounting for 60.22%, 59.47%, and 64.62% of this revenue, while its futures segment contributed 8.92%, 10.08%, and 8.45%, respectively. Any inability to sustain or increase their trading volumes could lead to a loss of market share, reduced revenue from transaction charges, and other adverse impacts on their business, operational results, financial position, and future prospects.
2. Issues, breakdowns, or shortcomings in their IT infrastructure, systems, or software, including those from external vendors, could negatively impact their business, reputation, and operational outcomes, and may result in regulatory measures or financial penalties imposed by SEBI.
3. The Company has faced and continues to face enforcement actions, penalties, and judicial proceedings that may or may not be resolved with SEBI regarding alleged violations and regulatory issues under applicable SEBI regulations. The results of ongoing and possible future proceedings are unpredictable and could significantly impact our business, reputation, financial standing, operational results, cash flows, and future prospects.
4. The organisation obtained 46.78%, 44.48%, and 45.26% of its operational revenue from its top ten trading members in the fiscal years 2026, 2025, and 2024, respectively. Any interruption to the services of these trading members, or their failure to bring on new trading members, could negatively affect their operations.
5. The company depends on external vendors for specific products, which include elements of its essential system infrastructure and software. We face operational risks, such as execution failures, system interruptions, or fraud, including risks arising from the activities of these third parties and other intermediaries, which could significantly and adversely impact our business, financial health, operating results, and future prospects.
6. The company’s operations rely on obtaining statutory and regulatory approvals, licenses, registrations, and permissions, all of which require periodic renewal and compliance with regulatory conditions, and they may not always secure or renew these in a timely fashion.
7. The application of Artificial Intelligence (“AI”) and machine learning technologies, as well as the implementation of AI-driven strategies by market participants, may adversely affect their businesses, reputations, financial positions, and operational results.
8. The company might need to make substantial payments to the Investor Protection Fund Trust (“IPFT”) and the Settlement Guarantee Fund (“Core SGF”), which could negatively affect its profitability and its ability to distribute dividends. Additionally, there is no guarantee that the total amount in these funds will be sufficient to cover investor claims or fulfil settlement responsibilities if clearing members default.
9. In the past, they have incurred late-submission fees due to delays in filing forms with the RBI for certain allotments made by their Company. They cannot guarantee that no legal actions or regulatory measures will be taken against their Company in the future concerning this matter.
10. The company depends on other Market Infrastructure Institutions (MIIs), including clearing corporations, depositories, and various financial intermediaries, to deliver their services. Any disruption to these entities’ operations could lead to delays or non-execution of transactions, potentially causing their customers to incur losses. This situation may negatively affect their business, reputation, financial status, and operational results.

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