File pic: A modern atrium inside the NSE headquarters in Mumbai
| Photo Credit:
sreeyashlohiya
The National Stock Exchange's (NSE) proposed initial public offering (IPO) could mark the completion of the "troika" of listed Indian market infrastructure institutions, according to a report by global brokerage Jefferies, which said the country's largest exchange is well-positioned because of its dominant market share, diversified revenue streams and robust profitability.In a report released on Tuesday, Jefferies said, "NSE Listing Will Complete The Trioka," noting that the exchange is more diversified than its domestic peer BSE and enjoys over 90 per cent market share across most business segments. The brokerage said NSE has built a sizeable technology products business, which contributes around 13 per cent of revenues, while it is also expanding its presence in commodities."NSE is more product diversified relative to BSE/MCX, with >90% share in most categories. NSE has also built a tech product suite (13% of revenues) similar to global peers, and is expanding in commodities," the report said.It added that regulatory provisions impacted operating performance in FY25 and FY26, but the exchange continues to generate strong cash flows with limited capital expenditure requirements.Highlighting the structural shift in India's capital markets, the report said, "India has become an options-driven market." It noted that the Indian equity options market recorded a 56 per cent CAGR during FY20-FY26, compared with 19 per cent CAGR in cash market turnover, with derivatives contributing nearly 70 per cent of operating revenues for Indian exchanges.According to Jefferies, NSE's dominance extends across equity cash, equity futures, single-stock options, bonds, currency derivatives and several other segments. The report said the exchange has over 90 per cent market share in most categories and also operates a growing technology and data business.On profitability, the brokerage said regulatory settlements related to SEBI's co-location and dark fibre matters weighed on reported earnings over the past two financial years. However, it added that the underlying business remains resilient. The report stated, "Excluding regulatory expenses, NSE is one of the most profitable exchanges globally," with normalised operating EBITDA margins remaining largely stable in the 76-77 per cent range during FY24-FY26.Jefferies also pointed to NSE's strong balance sheet, saying the exchange generated healthy operating cash flows while maintaining low capital expenditure of around 3-3.5 per cent of revenues. This enabled it to distribute 74 per cent and 85 per cent of earnings as dividends in FY25 and FY26, respectively.The brokerage noted that while regulatory actions and litigation remain key overhangs, the one-off nature of recent settlement costs suggests the core operating performance of the exchange remains intact. It also said the proposed offer for sale by PSU general insurers could improve their solvency position through stake monetisation in the exchange.Published on July 7, 2026
