The National Stock Exchange of India’s first day as a listed company saw subdued trading, but its valuation soared to place it among the world’s top bourses, highlighting strong investor confidence in India’s financial future.
The National Stock Exchange of India’s first day as a listed company was subdued, even as its valuation quickly placed it among the world’s most valuable bourses. NSE opened at ₹1,800 a share on Thursday, only a fraction above its issue price of ₹1,785, after briefly commanding higher valuations in the unlisted market before listing. By Friday’s close, its market capitalisation had reached about ₹4.4 trillion, making it the seventh-largest exchange globally, according to market data cited by Business Standard.
That figure reflects the scale of investor enthusiasm around India’s capital markets, but it also leaves little room for disappointment. At about 43 times earnings, NSE screens as expensive beside global peers such as Intercontinental Exchange and Nasdaq, which are expected to grow at a similar or faster pace over the next three years but trade on far lower earnings multiples, according to the research cited by Business Standard. Even so, the exchange’s operating business remains highly profitable, with an EBITDA margin of 66%, and analysts expect cash market turnover in India to rise by 14% to 16% a year, according to The Economic Times.
Macquarie has described NSE as “The Dominator” and set a target price of ₹1,965, implying roughly 9.6% upside from Friday’s close of ₹1,792.65. The brokerage said the exchange deserves a premium because of its dominant market share, strong network effects, deep liquidity and technology capabilities, and it sees revenue growing at about 12% annually through FY30. In a separate assessment cited by Business Standard, Macquarie said NSE trades at a 65% earnings multiple premium to international exchanges, but also delivers around 60% higher growth and returns, helped by what it called India’s structural financialisation trend.
Not all market participants see the rich valuation as a problem. Aniruddha Sarkar, co-founder and chief investment officer at Equinova Investment Managers, said the positives are already largely reflected in the price, even though he still sees a strong long-term story supported by rising financial inclusion. Vikas Gupta, chief executive of OmniScience Capital, said regulatory actions are unlikely to pose a lasting threat to trading volumes, arguing that any weakness should prove temporary as market participation deepens over the next few quarters. Sham Chandak, head of institutional equities at Elios Financial Services, said NSE’s premium to other global exchanges is justified by its superior margins, long record of growth and dominant position in the market.
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