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Summary: NSE takes a cut of almost every trade in the country. But not every trade is worth the same to it, and the one slice that carries the profit is exactly where a rival keeps taking ground. The IPO opens this week at a price that assumes the bleeding stops. The business isn't hard to admire. The price is harder.
National Stock Exchange (NSE), India’s largest stock exchange, is raising Rs 22,562 crore through an offer for sale, with the IPO opening on September 17, 2026. Currently, NSE takes a cut of nearly every trade in the country and keeps about 65 paise of every revenue rupee as operating profit. Its cash generation, margins and market position make the business difficult to fault. But its strongest rival is steadily taking share in one of its most lucrative businesses.
At the upper end of the price band, NSE is valued at 48 times its FY26 earnings. The question is whether that premium leaves enough room for a business that now has to defend its most valuable profit pool rather than simply harvest it.
A toll booth
An exchange earns a fee every time a trade is executed on it. NSE bills these transaction charges to its trading members, the brokers, and adds several smaller streams such as listing fees, rent for servers placed inside its own data centre (colocation), subscription charges for market data, licence fees from fund houses, and clearing charges for settling trades.
The weight sits in one place. In FY26, transaction charges were 78.7 per cent of operating revenue. Options, a type of derivative contract which lets traders bet on whether an asset’s price will rise or fall without buying the asset itself, accounted for 60.2 per cent. The cash market, where ordinary shares change hands, contributed 9.4 per cent and futures 8.9 per cent. The rest came from smaller streams such as colocation and connectivity, data feeds and terminals, listing fees, clearing and settlement, index licensing, income on operating funds and other items.
The tolls are not remotely equal. NSE earned Rs 9,998 crore of options revenue on premium turnover of Rs 142 lakh crore in FY26, a take of 7 basis points. It earned Rs 1,555 crore of cash-market revenue on turnover of Rs 261 lakh crore, a take of 0.6 basis points.
What is working in NSE's favour
#1 The options pool is growing faster
Combined option premium traded daily across both exchanges rose from Rs 63,912 crore in FY24 to Rs 77,184 crore in FY26, and then to Rs 93,967 crore in Q1 FY27, up 33.1 per cent on the year. NSE's own premium volumes grew 15.9 per cent in that quarter even as its share fell. Options revenue dipped just 1.9 per cent in FY26 and then rose 15.6 per cent YoY to Rs 2,744 crore in Q1. The share loss is real. The revenue damage so far is not, because the pool outgrew the loss.
#2 The decade-old regulatory bill has been paid
The regulatory overhang that stalled NSE's 2016 listing is now largely cleared. NSE absorbed Rs 2,174 crore in SEBI settlement fees over FY24 to FY26, including the Rs 1,491 crore colocation and dark fibre settlement. The Rs 1,432 crore of it recognised in FY26 dragged operating margin down to 64.8 per cent. With the legacy cases settled, margin was back at 75 per cent in Q1FY27.
What should worry an investor
#1 The share loss has not stopped
Equity option premium share has fallen every year, from 96.9 per cent in FY24 to 74.7 per cent in FY26 and 68.5 per cent in Q1FY27. Because options pay nearly 12 times the cash-market take rate, every point ceded there costs far more than a point held elsewhere.
#2 Nothing else is large enough to replace options
NSE has several revenue streams beyond trading, but their economics are structurally different. In FY26, listing fees contributed 2.1 per cent of operating revenue, data feeds 2.8 per cent and index licensing 0.9 per cent. These grow with listings, subscribers, assets and market participation, but none carries the transaction-driven volume multiplier that options do.
NSE IPO details
| Particulars | Details |
|---|---|
| Total IPO size (Rs cr) | 22,562 |
| Offer for sale (Rs cr) | 22,562 |
| Fresh issue (Rs cr) | - |
| Price band (Rs) | 1700-1785 |
| Subscription dates | Sep 17 - Sep 21, 2026 |
| Purpose of issue | Offer for sale |
Post-IPO
| Particulars | Details |
|---|---|
| M-cap (Rs cr) | 4,41,788 |
| Net worth (Rs cr) | 32,114 |
| Promoter holding (%) | - |
| Price/earnings ratio (P/E) | 47.9 |
| Price/book ratio (P/B) | 13.8 |
Financial history
| Key financials | 2Y CAGR (%) | FY26 | FY25 | FY24 |
|---|---|---|---|---|
| Revenue (Rs cr) | 6 | 16,601 | 17,141 | 14,780 |
| EBIT (Rs cr) | 6.1 | 10,749 | 12,259 | 9,543 |
| PAT (Rs cr) | 5.9 | 9,228 | 10,978 | 8,224 |
| Net worth (Rs cr) | - | 32,114 | 30,353 | 23,974 |
| Total debt (Rs cr) | - | 412 | 506 | 125 |
| EBIT is earnings before interest and tax; PAT is profit after tax excludes exceptionals | ||||
Key ratios
| Key ratios | 3Y average (%) | FY26 | FY25 | FY24 |
|---|---|---|---|---|
| ROE (%) | 35.6 | 29.5 | 40.4 | 37 |
| ROCE (%) | 39.4 | 33.9 | 44.6 | 39.6 |
| EBIT margin (%) | 66.9 | 64.8 | 71.5 | 64.6 |
| Debt-to-equity (times) | - | - | - | - |
| ROE is return on equity; ROCE is return on capital employed | ||||
Market Share
| in (%) | FY26 | FY25 | FY24 | |
|---|---|---|---|---|
| Cash Market (Turnover Basis) | 93 | 93.6 | 92.5 | |
| Equity Futures (Turnover Basis) | 99.8 | 99.9 | 99.9 | |
| Equity Options (Premium Turnover Basis) | 74.7 | 87.4 | 96.9 |
What the price is actually asking
At the upper price band, NSE is valued at 48 times its earnings. Set that against what the business has actually delivered: profit growth of 6 per cent a year over the last two years, against 30 per cent a year across the decade. The engine is moderating just as the price asks the most of it.
On the headline, NSE looks cheaper than BSE at 54 times. But BSE's multiple prices continued share gains from a small base: its profit rose 88 per cent in FY26, on revenue under a third of NSE's.
The price pays fairly for a business that works and asks the buyer to fund a defence that has not yet held. The margin of safety is thin, because the multiple assumes the pool keeps growing fast enough to offset a share loss that has continued since FY24. If the pool slows before the share stabilises, both halves of the arithmetic turn at once. For investors, the key watch item is whether NSE's option share stabilises over the next few quarters, and whether option volumes continue to grow and at what pace.
Also read: Hero Motors IPO: Is the EV story worth the price?
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