NSE IPO: Key highlights and risk factors for Rs 22,569-crore share sale by brokerage 

NSE IPO: The initial public offer (IPO) of National Stock Exchange (NSE) will open on September 17. The offer for sale (OFS) for Rs 22,569 crore will close on September 21. A total of 12,64,36,650 or 12.64 crore shares are on offer in a price band of Rs 1,700 – 1,785. The IPO is 100% OFS. So money will go to respective shareholders participating in the OFS. 

The key shareholders participating in the OFS include State Bank of India, Canada Pension Plan Investment Board, Aranda Investments (Mauritius), MS Strategic (Mauritius), The New India Assurance Company, SBI Capital Markets, Bank of Baroda, Stock Holding Corporation of India, General Insurance Corporation of India and United India Insurance Company.

Here's a look at key highlights of the issue and key risks to the OFS by brokerage SBI Securities. 

NSE IPO: KEY HIGHLIGHTS

1. Dominant position in India’s duopoly exchange market

The National Stock Exchange (NSE) holds a leading position in India’s largely duopolistic stock exchange industry. It has remained the country’s largest exchange by total turnover in the cash market and equity derivatives, based on notional turnover in equity options, since FY01.

NSE also has a strong position globally. In FY26, it ranked among the leading multi-asset-class exchanges worldwide by the number of trades in cash equities and contracts traded in equity derivatives. Its global market share stood at around 11.4% in cash equities and approximately 51.2% in equity derivatives.

The exchange also has a strong presence in the primary market. Companies raised around $20.1 billion through NSE in FY26, placing it among the top five exchange groups globally in terms of capital raised through IPOs. With 219 IPO listings during the year, NSE ranked among the top two exchange groups worldwide by the number of new IPO listings.

2. Structural growth drivers support long-term expansion

NSE is positioned to benefit from the ongoing financialisation of savings and the broader development of India’s capital markets. Rising investor participation, deeper liquidity, expanding fundraising activity, regulatory reforms, digital adoption and a wider range of financial products are expected to support the exchange’s long-term growth.

As participation from retail and institutional investors increases, higher trading activity can lead to greater market liquidity. This, in turn, can attract more participants and create a self-reinforcing growth cycle.

NSE is also expanding its product portfolio beyond traditional equity markets, including offerings such as electricity futures and commodity futures. Its strong index franchise and post-trade infrastructure further strengthen its position and provide additional avenues to participate in the expansion of India’s capital markets.

3. Technology-led model 

NSE operates a largely technology-driven business model, allowing it to achieve significant economies of scale as trading volumes increase. The exchange has built a highly scalable and resilient technology infrastructure and continues to invest in upgrades, cybersecurity and operational capabilities.

Its technology platform is designed to support multiple asset classes and handle extremely high transaction volumes. NSE can process billions of messages while maintaining microsecond-level order response times and nanosecond-level order acknowledgement response times across cash markets, equity derivatives and exchange-traded currency derivatives.

Its technology capabilities extend across the entire market ecosystem, including trading, clearing, surveillance and investor services.

NSE Clearing Ltd (NCL), the exchange’s clearing arm, supports both T+1 and T+0 settlement cycles and interoperability among clearing corporations. Its post-trade infrastructure is integrated with multiple depositories and clearing banks, enabling real-time processing while improving resilience and operational efficiency.

4. NSE International strengthens fundraising opportunities

NSE International Exchange (NSEIX), established in GIFT City under the International Financial Services Centres Authority (IFSCA) in 2016, is a key part of NSE’s international expansion strategy.

During FY26, NSEIX became the first Indian exchange to offer same-day expiry, or 0DTE, options on the Nifty 50 at GIFT IFSC. It also launched GIFT Nifty India FPI 150 derivatives in December 2025, tracking the top 150 stocks from the Nifty 500.

NSE has also expanded its international network through partnerships with the Singapore Exchange and memoranda of understanding with exchanges in Cyprus, Colombo and Taiwan. NSE International Clearing Corporation (NSEICC) serves as its clearing arm for these activities.

In addition, NSE launched NSEIX Global Access (NSEIXGA), a platform that enables Indian residents and overseas entities to access global investment opportunities through a single digital account.

5. Diversified revenue stream 

NSE’s extensive market-data ecosystem is an important and scalable asset. Data generated across its trading, clearing and post-trade operations can be monetised across several applications, including research, trading, risk management, surveillance and digital financial platforms.

The exchange generates revenue from services such as colocation, data connectivity, real-time data feeds, terminal services and data subscriptions. Market participants seeking the lowest possible latency can rent server infrastructure within NSE’s colocation facility, while users requiring real-time information can subscribe to its data feeds and terminal services.

These businesses provide a relatively stable, annuity-like revenue stream compared with transaction income, which is directly linked to market volumes.

NSE’s colocation racks increased from 934 in FY24 to 1,868 by Q1FY27, effectively doubling over the period. Revenue from colocation, connectivity, data and index licensing increased from Rs 1,395 crore in FY24 to Rs 1,956 crore in FY26, translating into an 18.4% CAGR.

KEY RISK FACTORS FOR NSE IPO

1. Risk of lower trading volumes

NSE’s revenue is partly dependent on trading activity and market volumes. A deterioration in macroeconomic conditions in India or globally could weigh on investor confidence and participation in the capital markets.

Factors such as slower economic growth, elevated inflation, higher interest rates, currency depreciation or a downgrade in India’s sovereign credit rating could reduce trading activity and adversely affect NSE’s average daily turnover and transaction-linked revenues.

2. Technology and cybersecurity risks

As a technology-intensive exchange, NSE remains exposed to cybersecurity threats, system failures and other technology-related disruptions. Any prolonged outage, cyberattack or failure of critical IT infrastructure could affect trading operations and result in financial, regulatory and reputational damage.

Apart from a distributed denial-of-service (DDoS) attack in May 2025, NSE did not report any uncontained or unmitigated cybersecurity incidents during FY24-FY26. However, the possibility of future attacks or technology disruptions remains a key risk.

3. Regulatory changes could affect volumes

NSE operates in a highly regulated industry and changes in market regulations can directly influence trading behaviour and exchange revenues.

For instance, the newly introduced Closing Auction Session (CAS) framework could affect market volumes and trading patterns. Any further regulatory changes that reduce transaction activity or alter market structures could put pressure on transaction-linked revenue growth.

4. Counterparty and systemic risks

NSE’s clearing operations expose it to counterparty and systemic risks. A clearing member could potentially fail to meet its settlement obligations because of insolvency, liquidity constraints or operational disruptions.

Such an event could expose NSE and its clearing subsidiary to financial losses and could also have broader implications for market stability.

5. Risk from inadequate risk-management mechanisms

NSE and NSE Clearing Ltd are required to maintain core Settlement Guarantee Funds (SGFs) for different product categories to ensure that trades can be settled even in the event of a member default. Any deficiency in the required SGF or failure of risk-management systems could result in financial and operational consequences, as well as regulatory action. Maintaining robust risk controls and adequate settlement resources will therefore remain critical to NSE’s operations.