The National Stock Exchange of India (NSE) made its trading debut on Thursday, September 24, with expectations of a modest 2%-3% gain. This comes after its $2.4 billion IPO, which was India's second-largest on record after Hyundai Motor's India arm's offering in 2024. The IPO was subscribed 5.71 times, attracting bids worth more than $10 billion, with institutional investors leading the demand.
The shares were priced at $1,785 each, the top end of the marketed range, valuing NSE at about $4.4 trillion. While the grey market premium (GMP) suggested an initial gain, it had fallen significantly from earlier highs of 14-17% to around 2-4.8% by the time of listing, indicating moderated expectations for the debut. Analysts like Dharmesh Kant of Cholamandalam Securities anticipate a positive listing but expect the stock to drift down due to concerns over moderating earnings growth from slowing derivatives activity.
NSE accounts for approximately 93% of India's cash-equity turnover and 75% of options activity. However, tighter regulations, higher taxes, and concerns over a new closing auction have slowed derivatives activity, a key revenue driver for the exchange. The IPO was entirely an offer for sale (OFS) by existing shareholders, meaning NSE itself did not raise capital; instead, the listing provides liquidity and transparency for its large shareholder base, including sovereign wealth funds from Norway and Abu Dhabi, and domestic institutions like LIC and the SBI group.
Anchor investors, who collectively put in $703 million, will see about half of their shares become eligible for trading on October 21, with the remainder on December 20. This staggered release will be closely watched by investors. The IPO's success is seen as a test of investor confidence in India's largest exchange operator, whose dominant market position underpins strong growth, even with the regulatory challenges impacting derivatives. The listing on BSE and MSEI marks NSE's long-awaited transition to a publicly traded company, making it India's second listed stock exchange after BSE.
