NSE holds firm on debut 

Shares of the country’s largest stock exchange listed at Rs 1,800 apiece, a 0.84% premium to the issue price of Rs 1,785, following the second-largest initial public offering (IPO) in Indian market history. The stock rose as much as 5.21% from its issue price of Rs 1,785 to touch an intraday high of Rs 1,878 before giving up some gains to close at Rs 1,818, still 1.85% above the issue price.

The relatively firm debut came on a volatile day for equities, with the BSE Sensex plunging as much as 1,248 points during the session — its steepest fall since July 8.

NSE dominated trading on the BSE cash market on its debut, accounting for about 46% of the exchange’s cash-market turnover during the session. 

Among companies that have come to the market with IPOs exceeding Rs 20,000 crore, NSE recorded the best listing-day performance. However, among the 14 IPOs with issue sizes above Rs 10,000 crore, its debut ranked 10th in terms of first-day returns.

At Thursday’s closing price, NSE commanded a market capitalisation of around Rs 4.5 lakh crore, making it the 11th most valuable listed company in India.

Speaking at the listing ceremony, NSE MD and CEO Ashish Chauhan described the listing as the beginning of a new chapter for the exchange.

“We now have a family of 3.6 million people,” Chauhan said, referring to NSE’s enlarged shareholder base following the IPO. More than 3.4 million retail investors were allotted shares in the issue.

“As we enter trading in public markets, it marks the beginning of a new chapter. This listing milestone calls for new alertness, thinking and even a sharper focus on execution and to serve this great nation of ours called Bharat,” Chauhan said.

He also argued that tighter regulatory measures in the derivatives market would not necessarily hurt participation. “People think market will slow down, but it historically never does,” he said, adding that India has a “huge runway” of potential new retail investors.

NSE Chairman Srinivas Injeti said becoming a listed company would not change the exchange’s fundamental duties and responsibilities, though it would bring greater scrutiny.

“As a listed entity, we will be subject to greater public scrutiny and that will enhance our responsibility and accountability, and we welcome it,” he said.

Injeti said NSE had debated whether difficult market conditions made it the right time to launch the IPO, but ultimately concluded that short-term market valuations should not determine the timing.

“Market valuation doesn’t matter. Inherent value of the company matters,” he said. If the inherent value exists, “there is no good time or bad time”.

Brokerages struck an optimistic note on NSE following its debut, citing its dominant market position, earnings visibility and the potential benefits from continued growth in India’s capital markets.

Macquarie initiated coverage with an ‘Outperform’ rating and a 12-month target price of Rs 1,965. It identified resolution of issues surrounding the closing auction session (CAS), growth in monthly options volumes and increased market activity from larger IPOs as potential catalysts.

The brokerage’s target values NSE at an estimated FY29 price-to-earnings multiple of 32.5 times and factors in expectations of high and stable EBITDA margins.

Emkay Global Financial Services initiated coverage with a ‘Buy’ rating and a one-year target price of Rs 2,050, implying an upside of around 15% from the issue price.

It cited the long-term growth potential of India’s capital markets, NSE’s leadership across market segments, its ability to navigate regulatory and macroeconomic changes, and the strong profitability and cash generation of market infrastructure institutions as key factors supporting its view.PL Capital, meanwhile, initiated coverage with an ‘Accumulate’ rating and a target price of Rs 1,950, based on an estimated FY29 price-to-earnings multiple of 35 times.