It’s finally that day on the Indian calendar when NSE, the country’s largest stock exchange makes its debut on D’Street. This Rs 22,561 crore IPO is the second largest issue in India’s primary market history. While most large issues thus far have seen rather lacklustre listing, LG Electronics India was an exception with 50% listing gains. Can the National Stock Exchange be the LG in 2026?
Not only has NSE GMP fallen steeply, but most market analysts believe that the issue is fairly priced and the chance of a massive listing day pop is unlikely. Notwithstanding the short-term uncertainties, they see the issue as a long-term bet.
At Financialexpress.com, we spoke to a host of market observers and capital market experts. Here’s a detailed analysis of the NSE issue valuations, market expectations and the investment rationale –
NSE: Short-term concerns Vs long-term triggers
| Short-Term Concerns | Long-Term Triggers |
|---|---|
| GMP has fallen sharply | India’s capital markets expanding |
| Large issue size | NSE dominates cash and F&O segments |
| Limited listing-day pop expected | Strong margins and cash generation |
| Pre-IPO selling may emerge after lock-in | Earnings recovery expected FY28 onwards |
NSE: ‘A buy for the long-term’
Deven R Choksey, Founder and MD of DRChoksey Finserv is betting on the growing prospects of the exchange business, and as a result, he believes that the NSE is “a ‘Buy’ proposition from a long-term investment point of view. You see the visibility of the next many years in the business.”
Explaining his investment rationale, he pointed out that, “I think NSE is growing at the rate of 15% annually. India’s market cap currently is 5 trillion dollars. And this market cap is expected to become 15 trillion dollars in coming years. With that kind of situation emerging, the exchange businesses is going to remain in favour because they are cash-generating machines.”
According to him, the kind of scale that NSE represents, it is a win-win proposition, “it is obvious that the exchange will be in demand from investors. They are dominant players in the cash and futures market and have a host of new product offerings coming up. I think the exchange business is only going to grow from the current level. And NSE has got a fabulous infrastructure already in place.”
NSE: ‘No fireworks in short-term but profitable over 2-4 years’
When you look at NSE, in terms of valuation, market veteran Ambareesh Baliga highlighted that the pricing of the National Stock Exchange “seemed like fair pricing, taking various factors into consideration, but there is not much on the table right now for the investors. I think one needs to look at the slightly longer term to invest because in the short- to medium-term, there may not be any fireworks. The primary reason is that it’s a very large issue.”
The other key factor that could be a potential “overhang” for the NSE shares is the huge number of “pre-IPO investors looking to book profit. If you are talking of the next 2-4 years it should perform well as the Indian markets are set to perform well.”
He believes that NSE has been one of the most “actively traded stocks in the unlisted market,” and those who had “bought it in the last 10-12 years may want to sell after 6 months when the lock-in period is over. People who have bought it pre-Covid or around Covid would make multi-bagger returns. People who have not sold in possibly the last year and a half on hopes of a better price at listing would be wanting to sell. So, I do see some amount of selling coming at that point of time (after the lock-in is over). Overall, if you’re talking of short- to medium-term, there would be pressure.”
NSE: ‘Earnings bounceback likely FY28 onwards’
Most market observers point to the risk of short-term headwinds for NSE. Mohit Mangal, Vice President, Centrum Broking elaborated that “over the short-term, there are a lot of regulatory headwinds. As a result, there could be some uncertainty in the short-term. But if I look in terms of the long-term, we see a lot of value in this.”
Explaining his investment rationale, he highlighted that this “is primarily because of some fundamental factors. One is that it is the market leader in all segments – be it the cash, options and futures segment. NSE has a strong EBITDA margin. Financially, this is a very strong company. These factors make a strong case for a long-term buy. You cannot write off a company like this just because growth was low for a few quarters. We expect a bounceback in earnings FY28 onwards.”
‘India’s capital markets on growth trajectory’
Even market veteran Arun Kenjriwal is betting big on the growing prospects of India’s capital market space and NSE as a direct play in this sector. “On capital markets, you cannot but be optimistic. You cannot have a negative view on the capital market because capital formation is the way forward, and it has been so for so many years,” he said.
According to him, “If capital markets continue to grow, if we find more and more issuances coming, if we find the concept of investing for a rainy day picking up in the country, all of this points to only one thing, there will be more transactions, there will be more volume, there will be more issuances, there will be more capital market trades. Each one of these activities means more money for an exchange.”
NSE: The investment rationale
| Expert | Short-Term View | Long-Term View | Key Reason |
|---|---|---|---|
| Deven Choksey | Listing pop not the main focus | Buy for long-term | Exchange business, cash generation, market-cap growth |
| Ambareesh Baliga | No major fireworks likely | Positive over 2-4 years | Large issue size, possible pre-IPO selling after lock-in |
| Mohit Mangal | Regulatory headwinds may weigh | Value visible from FY28 | Market leadership, EBITDA margin, earnings bounceback |
| Arun Kenjriwal | Capital market growth supports NSE | Optimistic | More listings, more trades, more transactions |
Conclusion
The jury seems to be quite conclusive about no fireworks in the short-term and big gains over the long-term. Most market observers are betting on NSE’s strong financial foundation, the market infrastructure and the growing trajectory of the capital market sector in the country. For all now, all eyes on the BSE screen at 10 am when the ceremonial bell will ring.
Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.