Mumbai, July 17, 2026
The National Stock Exchange of India (NSE) has received a ‘sell’ recommendation from a domestic brokerage ahead of its much-anticipated initial public offering (IPO), with Dolat Capital Markets warning that regulatory changes in the country’s derivatives market could weigh on the exchange’s future growth and valuations.
In an initiation report, Dolat Capital assigned a target price of Rs 1,550 for NSE, nearly 26 per cent below its prevailing unlisted market price of around Rs 2,085.
Recommendations on unlisted companies are uncommon in India, making the brokerage’s bearish call noteworthy as the country’s largest stock exchange prepares for what is expected to be India’s biggest IPO.
The brokerage said tighter regulations governing the equity derivatives segment are likely to reduce trading volumes and erode NSE’s market share, particularly in index options.
It added that while the exchange continues to have a strong long-term structural growth story, its current valuation leaves little room for upside given the regulatory headwinds.
According to analysts led by Punit Bahlani, a decline in proprietary trading volumes and the loss of market share in index options are expected to limit the exchange’s earnings growth in the coming years.
Dolat Capital estimates that NSE’s options trading turnover will decline at a compound annual rate of around 4 per cent between FY26 and FY29 as stricter regulations, softer retail participation and a weaker market cycle weigh on trading activity.
The report also noted that NSE’s valuation in the unlisted market is richer than those of several global peers despite relatively slower profit growth.
The exchange is currently valued at about Rs 5.2 lakh crore in the unlisted market, while its shares have declined around 3 per cent over the past 12 months, according to unlisted share-trading platform UnlistedZone.
The brokerage recommendation came at the time when NSE’s long-awaited initial public offering (IPO) is already delayed with pending regulatory and legal issues continuing to delay the process.
One of the key issues has been the long-running co-location and dark fibre cases. In its draft red herring prospectus (DRHP), NSE disclosed that it has proposed to pay Rs 1,491.21 crore to settle the regulatory proceedings with the Securities and Exchange Board of India (SEBI).
The exchange said the matters remain pending before the Supreme Court, SEBI and other judicial forums and have been disclosed under the material litigation section of the IPO documents.(Agency)
FOLLOW NOW
