The National Stock Exchange’s proposed listing could complete India’s trio of listed exchanges, joining BSE and MCX, while giving investors exposure to the country’s largest exchange by revenue and a dominant player across several market segments, according to a Jefferies equity research report.
Indian exchanges generated Rs 244 billion in consolidated revenues in FY26, with NSE accounting for around 70 per cent. The exchange commands more than 90 per cent market share in most major categories and has built a dominant position in cash equities, equity derivatives and clearing.
NSE reported operating revenue of Rs 166 billion in FY26, compared with Rs 48 billion for BSE and Rs 23 billion for MCX. Its operating EBITDA stood at Rs 111 billion, with a 67 per cent margin excluding regulatory expenses.
The exchange also holds a 93 per cent share of India's cash market, 75 per cent of equity options and 100 per cent of equity futures, according to the report.
Equity Options Drive NSE's Revenue Engine
Equity options account for 77 per cent of NSE's transaction revenues, making derivatives a crucial component of its business. Cash and equity futures contributed relatively smaller shares of 10 per cent and 9 per cent, respectively.
Jefferies noted that India's equity options market has grown at a 56 per cent CAGR over FY20-FY26 to reach Rs 772 billion in average daily premium turnover. However, index option average daily turnover growth slowed to 8 per cent in FY26 following regulatory changes aimed at curbing excessive speculation.
Despite concerns over the scale of India's derivatives market, option premium turnover remains significantly lower than in the US. India trades only around one-fifth of the US market in terms of option premiums, even though the number of option contracts traded is substantially higher due to smaller contract sizes.
Beyond derivatives, NSE is expanding its commodities business and technology offerings. Data and technology charges account for around 13 per cent of revenue, while the exchange has also gained a 70 per cent turnover market share in electricity futures.
Jefferies said NSE's strong balance sheet, limited capital expenditure requirements and high dividend payouts further strengthen its financial profile ahead of the proposed listing. |
