NSE sees tepid debut; exchange becomes ninth most valued listed company in India at Rs 4.63 lakh crore
NSE share price today: Shares of National Stock Exchange (NSE) made a subdued debut on Thursday, opening at Rs 1,800 per share on the BSE. The listing price saw a premium of less than 1% over the IPO price of Rs 1,785.Before the listing, NSE’s valuation at the IPO price of Rs 1,785 per share stood at Rs 4.42 lakh crore. By comparison, the market capitalisation of rival BSE is Rs 1.33 lakh crore.
NSE market cap
Following the listing, the shares rallied around 3%, and NSE’s market capitalisation rose to Rs 4.63 lakh crore. This makes it the ninth-largest listed company in India’s stock market. Exchange data showed that NSE has moved ahead of FMCG major HUL and healthcare company Sun Pharmaceuticals.The newly listed exchange is ranked below Reliance Industries, whose market capitalisation stands at Rs 16.77 lakh crore. HDFC Bank follows with Rs 11.25 lakh crore, while Bharti Airtel, ICICI Bank, SBI, TCS, Bajaj Finance and LT also rank ahead of NSE, according to stock exchange data quoted in an ET report.Despite the lacklustre opening, some market participants said the movement in NSE shares during the initial trading sessions could be shaped considerably by the balance between demand and available supply.Restrictions on exits for most large shareholders could keep the immediate supply of shares limited, which may provide support to the stock at a later stage.“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.Sebi regulations stipulate that shares held before the issue by non-promoter shareholders are subject to a six-month lock-in from the date of IPO allotment, except for certain categories of Alternative Investment Funds (AIFs).
Analysts’ view
Macquarie has started coverage of NSE with an Outperform rating and assigned a target price of Rs 1,965. The target represents a potential upside of 10% from the upper end of the IPO price band.The brokerage has described NSE as “The Dominator”, pointing to its leadership in market share and its strong position in the financial markets. It highlighted the exchange’s broad range of services, technology infrastructure and deep liquidity, which it said make NSE an important component of India’s financialisation and a “lynchpin” of India’s financialization.Macquarie also cited NSE’s strong network effects, profitability and cash generation as key supports for the business.For the FY26-30E period, the brokerage expects NSE’s revenue to grow at a compound annual growth rate of 12%. It said the expansion would be supported by non-transaction revenues and new products, although this would be partly offset by modest market-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 has also started coverage of NSE with a Buy recommendation, setting a Sep-27E target price of Rs 2,050. The target represents an upside of around 15%.The brokerage’s bullish assessment is based on three broad factors. The first is the long-term potential of India’s capital markets, supported by increasing wealth creation and financialisation. Emkay expects India’s per capita GDP to rise from around $3,000 to $10,000 over the coming decades, providing a lengthy growth runway for the country’s capital markets.The second factor is NSE’s ability to retain its leadership across various capital market segments over the years. Emkay said the exchange’s business model has enough flexibility to respond to shifts in regulation and macroeconomic conditions while sustaining profitable growth.The third consideration is the profitability and cash-generating ability of market infrastructure institutions (MIIs), including stock exchanges. According to Emkay, such institutions command higher valuation multiples globally than other capital market businesses because the latter tend to be more fragmented and face greater competitive pressures.Most brokerages covering the IPO had assigned a ‘Subscribe’ recommendation, although some, including Religare, took a neutral view.NSE’s Rs 22,562-crore IPO consisted entirely of an offer for sale (OFS), involving 12.64 crore shares. Since there was no fresh issue component, the exchange itself will not receive any money raised through the IPO. Instead, the proceeds will go to the existing shareholders who sold their stakes. The IPO was priced in the range of Rs 1,700-1,785 per share, with each lot comprising eight shares.Investor demand took the overall subscription level to 5.71 times the shares on offer. The retail portion was subscribed 1.39 times, while the non-institutional investor (NII) category was subscribed 6.55 times. Qualified institutional buyers (QIBs) generated the strongest response, with their reserved portion receiving 12.68 times subscription.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
