Should you prefer unlisted NSE over BSE? Growth, valuation debate & more

A sharp rally in BSE shares has drawn some attention towards the unlisted National Stock Exchange of India (NSE) has come under the spotlight lately as the shareholders count in the NSE crossed 1 lakh mark recently. The focus on NSE also comes after a sharp rise in BSE stock, while NSE's unlisted shares have not rallied in a similar fashion.
 

According to several media reports, National Stock Exchange of India (NSE) has emerged as the largest unlisted firm in India in terms of the number of investors, signaling a significant investor interest. Dalal Street is keenly awaiting the initial public offering (IPO) of NSE, which has been abeyance for quite a sometime.

Crossing the 1,00,000-investor mark in the unlisted market is more than just a symbolic milestone—it signals robust investor demand for NSE unlisted shares, said InCred Money. This demand is backed by strong market presence, growing revenue and profitability, and healthy future prospects. The strong fundamentals are reinforcing its attractiveness among investors, it said.

NSE reported a marginal 6.55 per cent year-on-year (YoY) jump in its net profit to Rs 2,650.11 crore, while its consolidated total income dropped Rs 4,397 crore. For the entire financial year 2024-25, NSE clocked a 47 per cent jump in its net profit at Rs 12,187.94 crore, with a 16.7 per cent YoY rise in total revenue to Rs 19,176.83 crore.

The company board of NSE has recommended a dividend of Rs 35 per share or 3,500 per cent for FY25, subject to shareholders approval. Additionally, the exchange contributed Rs59,798 crore to the exchequer during the fiscal year. To recall, shares of NSE had traded ex-bonus in 4:1 ratio in November 2024.

According to the dealers in the unlisted markets, shares of NSE are being sold in the range of Rs 1,550-1,650 apiece depending upon the quantity and availability of shares. The total market capitalization of NSE based on these levels is in the range of Rs 3.83 lakh crore to Rs 4.08 lakh crore as the company has a paid-up equity capital of 247.5 crore equity shares.

Sandip Ginodia, CEO of Kolkata-based Altius Investech, a firm dealing in unlisted and pre-IPO shares, said that NSE has a strong fundamentals with decent growth over the last few years. BSE is commading a P/E ratio of 78-80 times, while NSE is available at a P/E ratio of 40-45 times. BSE is rallying because of its growth but there is no comparison of their size.

"With the rising equity and investment culture, financial markets in India are going to grow. There are multiple segments and sectors are to be added in the Indian derivative segment, which shall be supporting NSE, Ginodia said. On the retail frenzy, he added that institutional bidders are exiting the counter amid the rising retail demand post the ISIN comes into the picture.

NSE is currently ranked the biggest derivatives exchange and second largest in equities by number of trades worldwide. NSE has a dominance over BSE. NSE held 99.8 per cent market share in equity futures, 94.6 per cent in the cash segment, 93.9 per cent in currency derivatives, and 81.2 per cent in equity options as of Q4FY25.

Echoing the similar tone, InCred Money added that the NSE is not just leading in India, rather its setting benchmarks globally. This near-monopoly not only highlights its scale but also reinforces why investor interest continues to swell.

However, some analysts believe that BSE has a better potential of growth over NSE and it is catching-up. This is also reflected in the stock price of BSE, which has surged nearly 25 per cent in the last one month. The stock is up 160 per cent in the last one year, while it has zoomed over 5,000 per cent in the last five years.

Hitesh Dharawat from Mumbai-based Dharawat Securities said that delay is NSE's IPO and its pending corporate governance cases are weighing on its valuations, while BSE, on the other hand, is listed and the growth possibilities are strong for it. "BSE has a strong headroom available for growth on the back of new product launches and rising market share."