When is the NSE IPO Coming?

This has been one of the most asked questions in the Indian share market community.

Such is the interest for one of the biggest and most awaited IPOs in India.

Anyway... after searching the entire web and going through multiple links, the dates for the NSE IPO still remain unannounced.

But a lot of reports state that the IPO is slated to open for subscription early next year.

National Stock Exchange (NSE) is a publicly listed company with ownership shared among some of India's top financial institutions.

The key domestic investors include Life Insurance Corporation (LIC) and Stock Holding Corporation of India.

Going by the reports, the value of NSE has doubled in value amid hopes of IPO. The precise valuation figures are still not confirmed but it's said the valuation has reached somewhere around US$ 36 billion!

The valuation could increase ahead of its IPO, so shareholders of NSE unlisted shares... keep your fingers crossed!

NSE Unlisted Shares Current Market Price

While there's still some time for the NSE IPO to come out, investors can purchase its shares in the unlisted market.

We wrote about how to buy unlisted shares in our recent editorial.

Such is the interest for one of the biggest and most awaited IPOs in India.

The key domestic investors include Life Insurance Corporation (LIC) and Stock Holding Corporation of India.

Instead, you have to buy them from a trusted and secured platform that sells unlisted shares.

When I say trusted platforms, I mean WWIPL.com, which specialize in facilitating these kinds of transactions. There are many more such domains that sell unlisted shares.

On WWIPL, NSE shares are currently quoted at Rs 7,300 per share!

Here's how the share price has moved over the year gone by -

NSE Share Price Performance

A Close Look at NSE and its Offerings

NSE offers a vast array of products and services, from equities and derivatives to debt instruments and currency trading.

It maintains a leadership position, standing tall as the world's largest derivatives exchange by trading volume and the third-largest in cash equities by the number of trades.

In the domestic markets, NSE enjoys a monopoly in the capital market and equity derivative segments, with a market share of 93% and near 100%, respectively.

NSE's market share in the currency options segment stood at 97%, while in the currency futures segment accounted for 68% in the financial year 2023.

NSE caters to the needs of high-volume and high-frequency traders by providing co-location facilities for seamless algorithmic trading.

The platform's wide range, combined with its dominant position in several asset classes, allows it to be incredibly responsive to market demands.

High trading volumes create a virtuous cycle for everyone involved. More participants are attracted to the exchange, leading to efficient price discovery.

This active trading environment makes NSE a listing powerhouse, attracting companies and offering investors a wider choice of stocks.

This robust ecosystem explains the healthy revenue growth, 80% of which comes from transaction charges followed by a mix of co-location charges (4.8%) and the balance 15% from multiple fee sources such as listing, book-building and processing.

NSE's growth trajectory is nothing short of phenomenal. Between 2019 and 2023, the sales have tripled while the net profits have quadrupled.

The business has not only multiplied swiftly, but it has also maintained its supernormal profit margins, thanks to its dominant position.

Over the last five years, the company's operating margins have been above 80% and net profit margins have been around 60%.

Furthermore, being an asset-light company, NSE has fuelled its growth without relying on debt.

The company doesn't spend a lot on capital expenditure. Capex, if any, usually goes towards technological advancements, a strategic investment that positions it for long-term success.

NSE Financial Snapshot

NSE is a formidable competitor to BSE in the equity segment (main contributing asset class to income from transaction charges).

BSE has been losing market share in this segment. In other segments such as currency derivatives, NSE has been able to wrestle market share back from BSE.

Strong Growth Prospect

The Indian economy is one of the fastest-growing major economies in the world, driven by a healthy banking system and a government pushing hard on infrastructure spending.

The private investment cycle has been doing well, led by increased capacity utilisation and healthier corporate balance sheets.

India's digital revolution is in full swing. The renewed focus on digitisation, formalising the economy, and making financial services accessible to everyone is projected to be a major growth driver for years to come.

This economic boom spells good news for NSE. While existing investment products like stocks and derivatives will remain popular, it's just the tip of the iceberg.

The recent surge in retail investor participation shows a clear hunger for new offerings.

NSE is perfectly positioned to cater to this growing demand with their innovative products and services.

New F&O Rules and the Impact on NSE

All being said, NSE was dealt with a big blow recently by the Securities and Exchange Board of India (SEBI).

The SEBI recently announced some fresh rules to de-addict Indian traders from F&O. This clampdown is expected to hurt NSE in a big way.

In this duopoly market, NSE is expected to lose more than its competitor Bombay Stock Exchange (BSE). This is because options trading account for 60% of NSE's revenues.

Among the six key steps to be taken, some with effect from November 20 next month, restricting of weekly expiry to one per exchange is seen as having the highest impact on volumes.

According to a leading brokerage firm, this new rule will impact NSE's option premium turnover by up to 40%.

Right now, NSE has four index derivative products - Nifty, Nifty Bank, Midcap Nifty, and Nifty Financial Services. Once the new rules kick in from next month, NSE will only have one of these expiries for weekly contracts.

Market experts are also of the view that this shift will result in BSE gaining market share from NSE.

That is why, BSE's stock price has been on a roll for the past 2 days!

BSE Share Price - 1 Month Performance

In conclusion... if you're looking to participate in India's exciting growth story, NSE is definitely a platform worth considering.

While an IPO is on the horizon, it's crucial to note that approval from SEBI is still pending.

Moreover, due diligence is essential. Wait for the full details of the potential IPO, including SEBI's decision, valuation, and plans before deciding if NSE aligns with your investment goals.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...