NSE IPO Review 2026: The 10-Year Wait, Financials, Valuation, Risks & GMP

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After almost a decade of waiting, the National Stock Exchange of India is finally heading to the public market.

There is an unusual twist. NSE shares will not list on NSE. They will trade only on BSE, its biggest domestic rival.

This is not simply a choice of listing venue. The regulatory framework for stock exchanges does not permit an exchange to regulate the listing of its own shares. BSE followed the opposite route when it listed on NSE in 2017.

The bigger story, however, is why the IPO took almost 10 years.

NSE first filed IPO papers in 2016. The proposed listing then spent years surrounded by regulatory and legal proceedings connected with its co-location infrastructure, dark-fibre access and related matters.

Nearly a decade later, NSE is coming to the market with a ₹22,561.57 crore IPO.

In FY26, NSE accounted for 92.99% of India's cash-market turnover, 99.79% of equity-futures turnover and 74.71% of equity-options premium turnover.

But market dominance alone does not answer the investment question.

At ₹1,785 per share, the IPO values NSE at approximately ₹4.42 lakh crore. Investors therefore need to understand where NSE actually makes its money, why options trading matters so much, what regulation can change, and how much of the strength of the business is already reflected in the IPO price.

NSE IPO Details at a Glance

*At the upper end of the price band. Source: NSE Red Herring Prospectus and announced IPO terms.

NSE IPO: 5 Numbers That Explain the Investment Case

Before going deeper into the business, these five numbers give a quick view of what matters most.

The last figure is particularly important. NSE has several businesses, but options trading alone contributes more than 60% of its revenue from operations.

Why Did the NSE IPO Take Almost 10 Years?

NSE had already attempted to go public in 2016.

What followed was a long regulatory and legal journey involving its co-location facility, dark-fibre connectivity, governance and related matters.

Why does speed matter so much to an exchange?

For a normal investor buying a stock manually, receiving market information a few milliseconds earlier may mean very little.

For automated trading systems executing large numbers of orders, those milliseconds can matter.

Trading algorithms continuously read prices, compare markets and place orders. Lower latency means information and orders can move faster between a trading firm's system and the exchange.

What is co-location?

Co-location allows trading members to place computer servers inside or close to the exchange's data centre.

The shorter physical distance reduces the time required to communicate with the exchange's matching engine.

Co-location itself is a recognised exchange service. The regulatory question is whether access is provided fairly and without giving selected participants an improper advantage.

What is dark fibre?

Dark fibre refers to dedicated fibre-optic connectivity that can offer very low-latency data transmission.

In an exchange environment, faster connectivity can be commercially valuable because even very small differences in latency matter to high-frequency traders.

The NSE proceedings therefore involved questions around access, exchange infrastructure, governance and fair treatment of market participants.

How did the matter move towards resolution?

The RHP records separate SEBI notices, regulatory orders, appeals before the Securities Appellate Tribunal and proceedings before the Supreme Court.

During FY26, NSE made a provision of ₹1,391.21 crore relating to settlement applications connected with the co-location and dark-fibre matters. It later paid ₹714.74 crore to SEBI on July 31, 2026 after adjusting amounts already deposited.

The Supreme Court disposed of the dark-fibre appeals on September 3, 2026. However, the September 10 RHP noted that applications seeking disposal of the co-location appeals were still pending for hearing.

An IPO Where NSE Itself Is Not Raising Fresh Capital

The ₹22,561.57 crore issue is entirely an Offer for Sale.

There is no fresh issue of shares.

This means NSE itself will not receive the money investors pay for the shares being offered. The OFS proceeds go to the existing shareholders selling their holdings.

Among the sellers are State Bank of India, Canada Pension Plan Investment Board, Aranda Investments (Mauritius), MS Strategic (Mauritius), New India Assurance, SBI Capital Markets and Bank of Baroda, along with other shareholders.

What Are Investors Actually Buying When They Buy NSE?

NSE is easier to understand as financial-market infrastructure rather than simply as a place where stocks are traded.

Every trading day, its systems connect investors, brokers, institutions and market makers.

Orders have to be matched. Trades have to be cleared and settled. Market prices have to be distributed. Brokers require connectivity. Large traders may require co-location. Asset managers use Nifty indices. Companies pay listing-related charges.

These activities create several revenue streams for NSE.

Where Every ₹100 of NSE's FY26 Operating Revenue Came From

This is the simplest way to understand NSE's business mix.

Source: NSE Red Herring Prospectus, FY26 revenue from operations.

Why Is NSE So Difficult to Compete With?

Stock exchanges benefit from a powerful network effect.

Investors generally prefer markets where there are already enough buyers and sellers to execute trades efficiently.

That attracts more participants, which creates still more liquidity.

This helps explain why successful exchanges can be difficult to displace once they reach scale.

Source: NSE RHP / Redseer. Market-share measures differ by product as shown.

NSE Financials: FY25 Boom, FY26 Reset, Q1 FY27 Recovery

NSE's recent financial performance is easier to understand as a three-stage story.

Source: NSE Red Herring Prospectus. Q1 figures cover the three months ended June 30, 2026.

FY25: A very strong year

Revenue from operations increased from ₹14,780 crore in FY24 to ₹17,141 crore in FY25.

PAT increased much faster, from around ₹8,306 crore to ₹12,188 crore.

Higher market activity, scale and operating leverage helped earnings grow substantially.

FY26: Reported profit fell for more than one reason

FY26 revenue from operations declined to ₹16,601 crore, while PAT fell to approximately ₹10,302 crore.

Part of the decline came from exceptional regulatory expenses.

SEBI settlement fees increased to ₹1,431.56 crore in FY26. The largest part, ₹1,391.21 crore, related to provisions for settlement applications connected with the co-location and dark-fibre proceedings.

But it would be incorrect to explain the entire decline as a one-off accounting item.

Underlying trading activity also moderated. Normalised Operating EBITDA fell from ₹13,317 crore in FY25 to ₹12,656 crore in FY26.

Q1 FY27: Early improvement

For the June 2026 quarter, NSE reported revenue from operations of ₹4,560 crore and PAT of approximately ₹3,120 crore.

Normalised Operating EBITDA increased to ₹3,546 crore from ₹3,170 crore in the corresponding quarter a year earlier.

One quarter does not establish a full-year trend, but it indicates that the earnings base remains substantial after the FY26 slowdown.

The Number Investors Should Watch Closely: Options Revenue

NSE looks diversified when the list of its businesses is viewed from the outside.

The income statement tells a different story.

Transaction charges generated 78.65% of FY26 revenue from operations.

Options alone contributed 60.22%.

Futures contributed another 8.92%, while cash-market transaction charges contributed 9.36%.

This is where NSE's strongest competitive advantage meets one of its biggest operating risks.

NSE has enormous scale in derivatives, but it does not independently decide the rules governing India's derivatives market.

SEBI can change contract specifications, expiry rules, risk requirements and market frameworks. The government can also alter taxes such as Securities Transaction Tax.

What If NSE's Options Revenue Falls?

NSE earned approximately ₹9,998 crore from options transaction charges in FY26.

A simple sensitivity exercise helps show why this concentration matters.

NSE Is Building Revenue Streams Beyond Trading

Transaction charges still dominate the business, but several smaller revenue streams are growing.

Nifty index licensing

NSE licenses its Nifty indices to exchanges, fund houses, financial institutions and other users.

These indices are used for ETFs, index funds, portfolio benchmarks, derivatives and other investment products.

Index licensing and data-subscription revenue increased from around ₹120.5 crore in FY25 to ₹151.8 crore in FY26, growth of roughly 26%.

Data, connectivity and co-location

Market-data feeds, connectivity services and co-location infrastructure allow NSE to earn additional revenue from the same market ecosystem.

Data-centre rack revenue increased strongly in FY26 as more members used co-location infrastructure.

GIFT City and international markets

NSE also operates international exchange infrastructure in GIFT City, including the NSEIX-SGX Connect and GIFT Nifty ecosystem.

These businesses remain far smaller than domestic transaction revenue today, but they add additional long-term monetisation opportunities.

NSE Has Large Treasury Investments, But Not All of It Is Free Cash

NSE reported treasury investments of around ₹64,771 crore at March 31, 2026, increasing to approximately ₹68,198 crore by June 30, 2026.

That is a very large number, but it should not automatically be interpreted as freely distributable shareholder cash.

NSE and its clearing businesses also maintain substantial funds connected with settlement, member margins and regulatory requirements.

The Core Settlement Guarantee Fund stood at approximately ₹13,079 crore at March 2026 and ₹13,392 crore at June 2026.

The RHP states that these funds are maintained separately and can only be used or invested within prescribed regulatory limits.

NSE vs BSE: Same Industry, Different Business Mix

BSE is the most relevant listed Indian comparison for NSE.

The RHP itself identifies BSE Limited as NSE's listed peer.

Still, simply comparing their P/E ratios can be misleading because the two businesses differ in scale, segment mix, market share and current growth dynamics.

*BSE P/E is the peer multiple disclosed in the NSE RHP using BSE's September 9, 2026 closing price.

NSE's historical FY26 multiple at the upper IPO price is therefore lower than the BSE multiple used in the RHP.

But this does not automatically make NSE inexpensive.

BSE has been gaining options market share from a smaller base, while NSE has a much larger earnings base. Their future growth rates may therefore look very different.

At ₹1,785, What Are Investors Paying For?

At the upper end of the IPO price band, NSE is valued at approximately ₹4.42 lakh crore.

Based on FY26 earnings

FY26 EPS was ₹41.62.

At ₹1,785 per share, this translates into a P/E of approximately 42.9x.

Based on annualised Q1 FY27 earnings

Q1 FY27 EPS is approximately ₹12.61.

Simply multiplying one quarter by four gives annualised EPS of about ₹50.44.

On that basis, the P/E falls to approximately 35.4x.

How quickly could today's P/E fall if earnings grow?

Rather than assigning an arbitrary target price, this shows how the valuation changes under different earnings-growth assumptions.

This is not a forecast of future earnings.

It simply shows why the valuation question ultimately depends on how quickly NSE can continue growing profit.

NSE IPO GMP: What Is the Grey Market Indicating?

Grey-market sentiment remains positive, but the premium has cooled from the levels seen earlier in September.

As of the morning of September 16, 2026, Fortune India reported that one tracker placed the NSE IPO GMP at approximately ₹160 per share, equivalent to around 9% over the ₹1,785 upper price band.

The same report noted that another tracker was indicating a premium of about 11.65%. India Infoline had reported a GMP of ₹198 on September 15, after the premium had earlier reached around ₹310 on September 5.

The Risks That Matter Most in the NSE IPO

The NSE IPO Investment Case in One View

The Key Question Before Investing

The main question in the NSE IPO is not whether NSE has built an important business.

Its market share, scale and profitability already establish that.

The more difficult question is what those advantages are worth at approximately ₹4.42 lakh crore.

At ₹1,785, the IPO is priced at around 42.9 times FY26 earnings.

If the June 2026 quarter is simply annualised, that falls to approximately 35.4 times.

Neither figure can be viewed in isolation.

NSE benefits from a large Indian capital-market ecosystem, strong network effects and several ways to monetise the infrastructure underneath it.

At the same time, a large part of today's earnings still comes from options trading, the area most exposed to regulatory change and increasing competition.

That makes the NSE IPO more than a bet on more Indians participating in the stock market.

It is also a bet on whether NSE can protect and grow its economics as the market structure around it continues to evolve.

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