NSE draws brokerage attention on stock market debut as 3 firms initiate coverage on Day 1

Shares of NSE, following a muted market debut, rallied over 4% to their day’s high of Rs 1,878 per share, becoming the 9th most valued company and leaving behind the likes of Hindustan Unilever and Sun Pharmaceuticals.

The stock listed at Rs 1,800 apiece on the BSE, less than a 1% premium over its IPO price of Rs 1,785 a share.

Much of the post market surge comes after a host of analysts and 3 major brokerage firms initiated coverage on the stock on the first day itself, with all three issuing bullish calls.


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Macquarie says NSE is ‘The Dominator’

Macquarie initiated coverage with an Outperform rating and a Rs 1,965 target price, implying an upside potential of 10% from the upper price band.

It describes NSE as “The Dominator,” citing its leading market share and strong market position. The brokerage highlighted NSE’s full suite of services, technology and deep liquidity, which make it a key part of India’s financialization, calling it the “lynchpin” of India's financialization. Strong network effects, profitability, and cash generation further support the business.

Also read: NSE becomes 9th most valued company with Rs 4.63 lakh crore m-cap after IPO. Who did it overtake?

For NSE, it forecasts a 12% revenue CAGR over FY26-30E, in line with the market, driven by non- transaction revenues and new products, partly offset by modest share losses in cash equities and F&O. “Upside could come from a higher P/N ratio, growing monthly options adoption, and stronger traction in new products.” the brokerage said.

The stock is valued at 22x FY29E EV/EBITDA and 29.5x FY29 PER, based on the upper price band, reflecting its marquee position in the ecosystem. Further re-rating could be driven by stronger traction in new products, which would provide upside to Macquarie's estimates.

Ekay starts coverage with Buy rating

Emkay also initiated coverage on NSE with a Buy rating and a Sep-27E target price of Rs 2,050, implying around 15% upside.

The brokerage's positive view on NSE rests on three key factors. First, India's capital market development and growth story has a long runway as wealth creation and financialisation gain momentum, with India's per capita GDP expected to move from around $3,000 to $10,000 over the coming decades.

Second, NSE has maintained a resilient leadership position across capital market business segments over the decades. Emkay believes its business model has sufficient levers to adapt to changing regulatory and macroeconomic conditions while continuing to deliver profitable growth.

Third, strong profitability and cash generation at market infrastructure institutions (MIIs), including stock exchanges, allow them to command higher valuation multiples globally than other capital market players, which are more fragmented and exposed to competition.

NSE commands uncontested leadership across cash and derivatives, driven by a self-reinforcing liquidity flywheel. In the cash segment, NSE holds 93% market share while retaining near-monopoly in the equity futures and stock options segment. While BSE has captured market share following its derivatives relaunch, it believes index options are transitioning to a phase of stabilization following several regulatory rejigs. “Supported by secular domestic financialization and under-penetration, NSE possesses a multi-year structural runway, as rising household savings, record SIP flows, and capital formation continue to compound.”

Read more: NSE shares make muted debut, list at less than 1% premium to IPO price. Should you buy, sell or hold?

PL Capital says Accumulate NSE shares

Domestic brokerage firm PL Capital has assigned an ‘Accumulate’ rating with a target price of Rs 1,950, forecasting an upside of over 9% from the IPO price band.

While transaction income accounted for 79% of NSE's operating revenue in FY26, PL Capital expects the exchange to increasingly benefit from a more diversified revenue mix, supported by multiple recurring income streams. Listing services, colocation, data feed and index licensing are expected to grow at a faster 14% CAGR over FY26-29E, compared with 9% for transaction income.

The brokerage expects operating revenue to grow at an 11% CAGR over FY26-29E, supported by NSE's dominance in cash and futures markets and a rising contribution from newer segments. However, continued market share erosion in the lucrative index options segment remains a drag.

NSE's EBITDA margin fell to 71.3% in FY26 from 77.8% in FY25 due to settlement payments related to pending legal cases. With these cases now resolved, PL Capital expects the margin to recover to 76% by FY29E. PAT is projected to grow at an 11% CAGR over FY26-29E, with FY29E RoE at 35%, supported by NSE's capital-light, high-margin business model.

The IPO ranked as India's second-largest, behind Hyundai Motor India's Rs 27,870-crore issue in 2024.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.