Introduction to NSE India
The NSE is the largest stock exchange in India and among the biggest in the world. Between January and June 2018, based on the number of trades in equity shares, NSE grabbed the tag of the world’s second-largest stock exchange, according to the World Federation of Exchanges (WFE). It has been instrumental in transforming India’s capital markets, bringing efficiency, transparency, and accessibility for investors.
Innovation in India Capital Markets: A Trailblazer
NSE has a legacy of leading financial innovation in India. Its significant milestones include the following:
- 1994: Brought e-screen based systems trading to Indian stock markets, replacing the infrastructure of floor-based trading.
- 2000: Launched listings of index features by introducing a derivatives exchange, and subsequently also launched trading through the internet, thus increasing accessibility for retail investor.
All-in-one Business Model: NSE operates an all-in-one ecosystem of:
- Exchange listings
- Trading services
- Clearing and settlement
- Market data feeds and index creation
- Tools for financial literacy and tech solutions
- Surveillance of listed companies and trading members for compliance
Technological Leadership and Impact on the Market
As an early adopter of financial technology, NSE has been consistently investing in contemporary solutions to ensure the robustness and efficacy of its trading infrastructure. This technology focus makes possible:
- Fast transactions with low latency, enabling level playing field for market participants.
- The ability to scale to large volumes of trading across asset classes.
Through its technological innovations, NSE has established itself as one of the most trusted stock exchanges in the country as well as internationally.
Timeline of Growth and Market Expansion
NSE was incorporated in 1992 as the first demutualised stock exchange and got recognition from SEBI in April 1993. Started with the wholesale debt market in 1994, the exchange later introduced cash market segment. It has since grown its product offerings to include trading in equities, derivatives, bonds, and alternative investment instruments.
NSE Unlisted Share Price Analysis
The unlisted shares of NSE have been the top performers in the pre-IPO market and continue to witness strong investor interest.
- NSE’s share price also rose to ₹3,700 a share from ₹3,400 a share in August 2022, in spite of wider sell-offs in the unlisted market.
- Some people also refer to as total outstanding shares which according to the data stood at close to 50 crore shares on March 31, 2023.
- That is an unlisted market cap of ₹1,85,000 crore, and over the last three years a 3x increase in valuation.
- From the data, we can see that an increase in Revenue & PAT directly correlates to increase in valuation, which makes NSE an attractive play in the unlisted space.
Valuation in the Future + Future Growth
Given the surging trading volumes more especially in options and derivatives, the market valuation of NSE is expected to expand further. The strong financial performance of the exchange, its growing product offerings and unprecedented market leadership signal massive potential for future growth, making unlisted shares a solid investment for long term.
Anticipated IPO & Regulatory Events
Initial Public Offering (IPO) by NSE has been on the cards for some time now. However, regulatory challenges especially SEBI’s probe into the co-location case delayed the process.
- The SAT also decided on the co-location case by upholding the SEBI orders, while the SC ordered SEBI to refund ₹1,000 crore, the amount that was collected as penalties.
- SEBI has filed an appeal against the order, which will be heard in September 2023.
- Once it clears regulatory hurdles, NSE is likely to go ahead with its IPO which may further escalate its market valuation.
Conclusion
NSE continues to be the unrivaled leader in the country’s stock market ecosystem, redefining industry standards of trading excellence, transparency, and technology-led solutions. The company’s strong financials, increasing valuation and the potential IPO makes it one of the hottest opportunities in the unlisted market. NSE is well set up for long-term growth as the exchange procures an ongoing expansion of its footprint, benefiting from the solution of its regulatory issues and serving as a cornerstone for financial market sophistication in India.
