$46 billion IPO: NSE is the world’s most expensive stock exchange. Can it also become the most valuable?

NSE's Rs 22,569-crore IPO has opened for subscription, putting India's largest stock exchange in direct comparison with global listed exchanges such as Nasdaq, CME Group, Intercontinental Exchange, LSEG, HKEX and SGX. India's largest exchange is coming to the market at a rich valuation. At the upper price band of Rs 1,785, the exchange is valued at about Rs 4.42 lakh crore, or nearly $46 billion.

Valuation versus global peers

On earnings, NSE is asking for a multiple that is higher than most large global exchanges. At 42.9 times FY26 earnings, NSE is valued above Nasdaq, CME Group, ICE, HKEX and LSEG, according to analysts.

Shruti Jain, Chief Strategy Officer at Arihant Capital Markets, said NSE’s profitability is among the best globally, but its earnings multiple is also the richest among major exchanges. "This premium is not because NSE is a larger exchange but because investors are valuing it based on India’s long-term capital market opportunity and NSE's dominance," Jain said.


"In a way, investors are paying for India’s growth story, not just NSE," she said.

The numbers show the gap clearly. NSE’s market value is estimated at about $46 billion, compared with about $54 billion for Nasdaq, $99 billion for CME Group, $88 billion for ICE, $82 billion for LSEG, $67 billion for HKEX and $14 billion for SGX.

But NSE is much smaller than several of them by revenue. Its FY26 revenue is estimated at about $1.95 billion, compared with about $5.2 billion for Nasdaq, $6.1 billion for CME, $10 billion for ICE and $12.1 billion for LSEG.

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Profitability better than peers

The reason investors are still willing to value NSE at a premium is its profitability. NSE’s net margin is estimated at about 55%, close to CME's 57% and HKEX’s 59%, and higher than Nasdaq's 34%, ICE’s 30%, LSEG’s 20% and SGX’s 47%.

Dr Ravi Singh, Chief Research Officer at Master Capital Services, said NSE's margins and market position partly support the pricing.

"NSE's strong margins, dominant market position and growth potential partly support this premium valuation, supported by its strong presence in cash, derivatives and other market segments. Its asset-light business model also supports healthy cash generation and operating leverage," he said.

Jain said NSE controls more than 90% of India’s cash market turnover and is the world’s largest derivatives exchange by contracts traded. She said very few exchanges globally generate margins above 50%, putting NSE among the most efficiently run exchanges.

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"NSE is a near-monopoly controlling over 90% of cash market turnover and is the world’s largest derivatives exchange by contracts traded. When we talk about financials, few exchanges in the world generate margins above 50%. This puts NSE in the league of some of the most efficiently managed exchanges in the world," Jain said.

The India story is also one of the main reasons behind the premium. Retail participation, demat accounts, SIP flows and equity-market activity have grown sharply after Covid. India still remains under-penetrated compared with developed markets, leaving room for capital-market activity to expand over the next decade.

Kunal Rathi, Head of Investment Banking at Aikyam Capital Group, said the IPO valuation reflects the scale and growth potential of India’s capital markets.

"NSE IPO valuation reflects the scale and growth potential of India’s capital markets. At Rs 1,785 per share, the issue is valued at about 42.9x FY26 diluted earnings, compared with roughly 25-31x PE multiples of major listed exchanges globally," Rathi said.

Risks for the premium

The biggest risk is NSE’s dependence on transaction charges, especially derivatives. The exchange has benefited from the post-Covid boom in options trading, but regulators have been tightening rules to reduce excessive speculation and expiry-day volatility.

Indian equity derivatives volumes may slow after the sharp growth seen in recent years. "I think Indian equity derivatives volumes will witness a slowdown, and the unprecedented growth they enjoyed post-Covid may not be sustainable due to so many regulatory measures in options trading," Jain said.

This is the main overhang for investors. A rich valuation can hold if earnings continue to grow. But if options volumes slow sharply, NSE’s earnings momentum may come under pressure.

NSE is also trying to diversify its revenue base. The exchange has launched several new products over the last 15 months, including electricity futures, electronic gold receipts and natural gas futures. It has also incorporated a national coal exchange.

The IPO size has already been trimmed. NSE had earlier filed for a larger offer, but the final offer size was cut by more than 15%. Its IPO will still be among the largest in India and the biggest issue of 2026 so far.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and 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 disclourses here.