NSE IPO, when, why and how to apply for it?

Summary

The NSE IPO is highly anticipated with its market dominance, and 201% valuation surge in 2024. With pending regulatory approvals and past legal challenges, NSE`s strong financials, make it a sought-after listing. We have covered various aspects of NSE`s IPO in this short and insightful article and even the steps to apply for it.

Introduction to NSE:

One of the leading stock exchanges in the world, the  National Stock Exchange (NSE) provides investors with easy access throughout India with a fully automated, screen-based electronic trading system. It provides services such as Trading, Colocation, Exchange Services, Data Feeds, Licensing, Clearing & Settlement etc.

The NSE is ranked 7th globally as of December 2024, with a market capitalization of more than Rs.462 lakh crore ($5+ trillion). It manages more than 21 crore accounts and has ~11 crore unique investors.

When is the NSE IPO coming?

NSE’s IPO is probably the most anticipated IPO of 2025, and a lot of investors are looking forward to it. However after going through multiple websites and reports the details regarding the issue size, price band and the date are uncertain since the company is yet to be announce them. 

According to reports, NSE has approached SEBI (Securities Exchange Board of India) in Aug 2023 seeking approval to file the DRHP for its IPO. In fact a group of investors led by the People Activism Forum has approached the Delhi High Court, seeking updates on the NSE IPO from the Indian market regulator and to approve the listing of NSE shares. With such events and the anticipation among its investors we shall see its IPO coming soon.

Why is the NSE IPO highly anticipated?

NSE is a dominant player in the Indian stock exchange market. It enjoys a duopoly competition with BSE but its market share showcases it as a monopoly, especially in the equity derivative segment with around 99% market share. NSE even has its flagship index - the NIFTY 50, which accommodates the top 50-stock in an index that functions as a barometer for the Indian capital markets. It is widely utilized by investors and analysts particularly to track investments and stocks.

NSE’s strong market position, robust financials and advanced technology ride the anticipation for its IPO reflected in its valuation, which surged 201% in 2024 to Rs. 4.70 lakh crore, making it the 10th most valuable company. Shareholders of NSE unlisted shares should be optimistic since the valuation may rise further before its IPO.

Financial Performance and Growth of NSE

NSE had a stellar performance over the years, which is reflected in its financials. According to Sharescart data, NSE’s sales grew 5x in last 4 years from Rs.3507 crore to Rs.14,780 crore between FY20-24 at a CAGR of 43.3%. Its Net profit surged 4.5x from Rs.1884 crore to Rs.8406 crore in last 4 years at a CAGR of 45.3%. 

NSE has achieved this figures with an asset light business model and with zero debt, showcasing its operational efficiency. 

In comparison with its competitor BSE (Bombay stock exchange), which is trading at a PE of 60x, NSE’s PE of 55x makes it appear undervalued. In last 3 years NSE delivered 167% return to its investors compared to 81% return offered by BSE. With this NSE showcases a better financial performance in terms of sales growth, profitability and valuation against BSE and the industry average.

The key driver for NSE’s financial success is its market share dominance. As per the Q3 FY25 result, NSE holds majority of the market share (refer the image attached above) and leaving the residual for BSE. It now holds the 1st position globally in the derivatives market in terms of contracts traded and is poised to grow more from here with the rise in investment culture in india. 

Legal Challenges & Resolutions for NSE

The National Stock Exchange (NSE) IPO has faced several legal and regulatory challenges over the years around NSE’s technological infrastructure, corporate governance practices and other pending legal matters. In 2015 it faced the co-location scam, where there were allegations that certain brokers received preferential access to its co-location servers, leading to unfair trading advantages. The SEBI imposed fines on NSE and ordered it to improve its transparency. Even a show cause notice was issued against its former executives but was later disposed of due to insufficient evidence. 

A petition regarding the NSE's IPO was filed by the Forum in May 2024, then in August 2024, SEBI ordered NSE to reapply for a No Objection Certificate (NOC). However, the Forum contested the petition, based on unresolved co-location fraud issues and doubting its legal standing but NSE maintains that it has complied with SEBI's regulations, citing communication dated August 27 and May 14 as evidence.

The CEO & MD Ashish Chauhan affirmed the exchange’s willingness to comply with SEBI’s requirements and address regulatory concerns, even Nuvama Institutional Equities stated that NSE is on track to overcome these issues.

NSE unlisted shares details

The National Stock Exchange shares are traded in the unlisted market & can be bought or sold via platforms like Sharescart.com. Currently the stock of NSE is trading at Rs.1870/share with a lot size of 500 shares. It holds a market cap of more than 462 lakh crore. In terms of valuation it is available at a PE of 55x and a PB of 19.3x. In last one year it has doubled from Rs.956 to Rs.1870 now.

One important thing to note here is that NSE has got Right of first refusal (ROFR) clause meaning if a shareholder wants to sell its shares, they must first offer them to other existing shareholders before selling to outsiders. This was done to prevent unwanted ownership changes and ensures that shares remain within the preferred group of investors.

How to Apply for NSE IPO?

As of now, NSE has not officially announced its IPO timelines. However, once it is launched, you can apply through these steps:

Steps to Apply for NSE IPO:

1. Check IPO Details – Keep track of NSE’s IPO announcement, issue price, and subscription dates through websites like sharescart.com or stock exchanges, brokers etc.
   
   

2. Open a Demat & Trading Account – Ensure you have a Demat and trading account with a registered broker or depository participant (DP) like Zerodha, Upstox, or Angel One.

3. Apply via ASBA (Application Supported by Blocked Amount)
   • Log in to your bank's net banking or trading app.
   • Select NSE IPO from the IPO section.
   • Enter the lot size (number of shares) and bid price.
   • Funds will be blocked in your bank account until allotment.
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4. UPI-Based Application (For Retail Investors)
   • Apply via broker platforms like Zerodha, Groww, or Paytm Money
   • Enter your UPI ID and approve the payment request.

5. Wait for Allotment – If shares are allotted, they will be credited to your Demat account. If not, the blocked funds will be refunded.

6. Listing & Trading – On the listing date, you can sell or hold NSE shares in the stock market.

Note: If you are an existing investor of NSE, there is a 6 month lock-in period you have follow as per SEBI’s rule, this means you cannot sell your shares immediately when NSE shares get listed via IPO.