Whalesbook
Record 20 Merchant Bankers Appointed
NSE has appointed a record 20 merchant bankers for its upcoming IPO, a first in Indian capital market history. This large team, larger than the 18 banks for ICICI Prudential AMC's offering, signals NSE's plan to manage a complex and high-stakes deal. The extensive syndicate aims to reduce execution risks, reach a broad market, and navigate the valuation for an exchange of NSE's size. The firms include major domestic and international players such as Kotak Mahindra Capital, JM Financial, Axis Capital, IIFL Capital Services, Motilal Oswal Investment Advisors, ICICI Securities, SBI Capital Markets, Nuvama Wealth Management, HDFC Bank, Avendus Capital, Morgan Stanley India, Citigroup Global Markets India, JPMorgan India, HSBC Securities India, IDBI Capital, 360 ONE WAM, Anand Rathi Advisors, DAM Capital Advisors, Pantomath Capital Advisors, and Equirus Capital.
IPO Pathway Cleared After Years of Regulatory Delays
NSE's IPO has faced delays for nearly a decade, mainly due to regulatory issues like the co-location scandal. The Securities and Exchange Board of India (SEBI) issued a no-objection certificate (NOC) in January/February 2026, marking a key step. This came after NSE settled a ₹643 crore penalty in October 2024 for the co-location case. SEBI has noted further deficiencies, giving NSE 24 months to address them. NSE's profit after tax for the quarter ending December 2025 fell 37% year-on-year to ₹2,408 crore. However, profit rose 15% from the previous quarter. The exchange is proceeding with an offer-for-sale to provide liquidity to existing shareholders.
Targeting ₹6-7 Trillion Valuation
NSE aims for a valuation of ₹6-7 trillion for its IPO, which would rank it among India's most valuable listed companies. The IPO size is expected to be ₹28,000 crore to ₹38,000 crore, representing about 4.5% to 5% equity divestment. Unlisted shares suggest a market cap between ₹4.64 lakh crore and ₹4.90 lakh crore as of early 2026, with P/E ratios around 38x to 62.2x. This compares to rival BSE Ltd's market cap of ₹1.11-1.13 lakh crore and a TTM P/E of 53.76x-55.3x in March 2026. NSE's strong market share (93% in cash equities, 57% in derivatives) and diverse revenue streams support its premium valuation.
Market Volatility and Execution Risks Loom
The IPO faces challenges from current market volatility. Geopolitical tensions have caused foreign investors to pull out, leading to sharp drops in Indian indices like the Sensex and Nifty 50 in March 2026. This has hurt the primary market, with many 2026 IPOs performing poorly. NSE's own profit decline in late 2025 also reflects this tough environment. Executing a large IPO after years of delays carries risks, especially managing investor expectations amid market uncertainty.
Outlook: Dominance Amidst Market Storms
Despite market turmoil, analysts are cautiously optimistic about NSE's future. Its dominant market position and India's economic growth provide a strong base for expansion. As regulatory issues clear, NSE's performance could improve, and market volatility might even boost trading volumes. A successful IPO at its target valuation would be a landmark event for India's capital markets, highlighting NSE's crucial role.