Shares of the much-awaited National Stock Exchange (NSE) made a muted market debut on Thursday, listing at Rs 1,800 apiece on the BSE, less than a 1% premium over its IPO price of Rs 1,785 a share. NSE’s post listing market capitalization now stands at Rs 4.63 lakh crore, making it the ninth largest listed company in the Indian stock market. Data shows that it has overtaken FMCG bellwether HUL and healthcare giant Sun Pharmaceuticals.

The newly listed exchange now ranks behind Reliance Industries which has a market capitalisation of Rs 16.77 lakh crore, followed by HDFC Bank at Rs 11.25 lakh crore, along with Bharti Airtel, ICICI Bank, SBI, TCS, Bajaj Finance, and LT, stock exchange data showed.

At the IPO price of Rs 1,785 a share, NSE commanded a valuation of Rs 4.42 lakh crore before its market debut. In comparison, rival BSE has a market capitalisation of Rs 1.33 lakh crore.

While the initial listing was muted, some market participants said NSE's share price in the early days could be significantly influenced by demand-supply dynamics. Exit curbs on most large investors could limit the immediate supply of shares in the market, potentially supporting prices later. "While GMP indicators hinted at a muted 2-5% premium, the real story lies in its tight initial supply," said Manish Bhandar of Vallum Capital Advisors.

Under Sebi rules, pre-issue shares held by non-promoter shareholders, barring some categories of Alternative Investment Funds (AIFs), are locked in for six months from the IPO allotment date.

What are analysts saying about NSE shares?

Macquarie has 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.

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.

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.

Most brokerages tracking the IPO had a 'Subscribe' recommendation, while some, including Religare, maintained a neutral stance.

YES Securities said almost all listed equity trading risk in India flows through a single platform. According to the brokerage, NSE's advantage extends beyond pricing to a liquidity cycle in which orders move towards tighter spreads, companies list where trading activity is present, and deeper markets attract more participants.

NSE IPO

The Rs 22,562-crore NSE IPO was entirely an offer for sale (OFS) of 12.64 crore shares. With no fresh issue component, NSE itself will not receive any proceeds from the offering, with the money going to existing shareholders selling their stakes. The exchange had set the IPO price band at Rs 1,700-1,785 per share, with a lot size of eight shares.

The issue was subscribed 5.71 times overall. The retail portion was subscribed 1.39 times, while the non-institutional investor (NII) category saw 6.55 times subscription. Qualified institutional buyers (QIBs) placed the strongest demand, with their portion subscribed 12.68 times.

As of the June quarter, foreign institutional investors (FIIs) held 26.41% of NSE, while individual shareholders with holdings of up to Rs 2 lakh accounted for 12.71%. Individuals with holdings above Rs 2 lakh held another 9.58%. Alternative investment funds (AIFs) held 5.31% and insurance companies 0.13%.

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 disclaimershere.