The long-awaited National Stock Exchange of India (NSE) IPO is set to make its stock-market debut. Ahead of its listing, 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.

Strong network effects, profitability and cash generation further support the business. Macquarie expects platform expansion to drive revenue growth, while noting near-term pressure from CAS.

Why is Macquarie bullish on NSE shares?

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.

Macquarie sees near-term pressure from the Closing Auction Session (CAS), while remaining constructive on the industry's long-term outlook. Industry data indicates that CAS is weighing on trading activity as investors adjust to the new framework, with the brokerage assuming near-term pressure on cash equity, derivatives and MTF volumes.

Macquarie believes NSE's superior fundamentals justify a premium multiple. While NSE trades at a 65% P/E premium to international exchanges at 30x FY29E versus 18x, NSE delivers around 60% higher growth and returns, supported by India's structural financialisation tailwinds.

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.

NSE IPO GMP ahead of listing

Ahead of its much-awaited market debut, NSE's shares were commanding a 2.2% premium in the grey market over the IPO's upper price band of Rs 1,785 per share. The grey market premium (GMP) has eased from around 4% earlier, indicating a relatively modest premium at listing.

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; the money goes 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.

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

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.

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