Motilal Oswal on NSE: As the country’s leading stock exchange, National Stock Exchange (NSE) gears up to roll out its initial public offering after a slew of regulatory issues, the company’s MD and CEO Ashish Kumar said that post the receipt of SEBI’s NOC, the company will come up with the public offer in 8-9 months.
So, as the NSE IPO now looks not so distant away, Motilal Oswal Financial Services signals its bullishness on the counter ahead of its upcoming IPO. The brokerage has listed the below mentioned investment rationales-
Dominant position: The domestic brokerage noted that the exchange commands a market share of 94 per cent in cash equities, 99 per cent in equity index futures and 88 per cent in equity index options premium.
Robust performance despite tough environment: In FY2025, Revenue from operations grew 16 per cent year-on-year (YoY) to Rs 17,141 cr, while net profit surged 47 per cent on-year to Rs 12,188 crore. With further improvement in Q4 FY25, EBITDA and PAT margins remain strong at 74 per cent and 58 per cent for FY2025. Earnings per share (EPS) and return on equity (ROE) have also shown significant growth, reaching Rs 49 and 45% in FY25, respectively.
Future growth potential: Highlighting the strong prospects of NSE, the brokerage pointed out that India has among the lowest retail participation rates (around 3-4 per cent) compared to countries like the US (over 55-60 per cent). Even a modest increase in this percentage would translate into substantial gains for NSE, it added.
Ease of transaction to ease liquidity: Starting March 24, 2025, NSE has removed the ISIN freeze so investors can trade its shares freely like other unlisted shares. This reduces the share transfer approval process from 3 months to a single day.
Impact of regulations now behind: Following the implementation of F&O regulations, there has been a recovery in volumes, as reflected by NSE’s options premium ADTO (average daily turnover), which recovered from a low of Rs 47,900 crore in Feb’25 to Rs 58,200 crore in Apr’25. The impact on topline was softened by the improvement in premium ratios and increase in Average Ticket size. Basically traders move to higher-ticket, non-expiry contracts. NSE is likely to benefit from stable revenue, and margins may see improvement, as costs
(clearing costs & SEBI fees) are expected to reduce.
IPO may soon receive SEBI clearance: National Stock Exchange (NSE) may receive clearance from SEBI to file its IPO prospectus by the end of July 2025. This follows a proposed settlement to resolve the long-standing co-location and dark fiber disputes.
Once SEBI issues a no-objection certificate (NOC), the NSE would likely take 4–5 months to prepare its Draft Red Herring Prospectus (DRHP), followed byanother 2–3 months for regulatory review. If all proceeds smoothly, NSE could be listed on the BSE by Q4FY2026.