National Stock Exchange Leads Domestic Market, Outpaces Global Growth: Nuvama

The National Stock Exchange of India, one of the world’s largest and fastest-growing exchanges, continues to maintain a commanding lead in the domestic market while outpacing global peers in growth and profitability, says Nuvama.

As it prepares for its highly anticipated IPO, expected as early as the first quarter of 2025, the NSE's position as a market leader underscores its strong appeal to investors.

With a market share of 93% in cash equities, 99% in equity index futures, and 88% in equity index options premium, NSE’s dominance in India’s capital markets is hard to rival, the brokerage notes. 

The exchange’s pivotal role in introducing electronic trading to India in 1994 has established it as a cornerstone of the country’s economic growth and a homegrown success story on the global stage.

The NSE's growth in equity index options volumes drove an impressive revenue and net profit CAGR of 43% and 47%, respectively, between fiscal 2020 and fiscal 2024. Its Ebitda margin also rose from 62.8% in fiscal 2020 to 71.5% in fiscal 2024, showcasing robust operational leverage.

While Indian exchanges derive a larger share of their income from trading volumes compared to global peers such as the Tokyo Stock Exchange, the US IT index Nasdaq, and the Intercontinental Exchange, NSE’s growth metrics have outshined them. The exchange posted a five-year revenue CAGR of 33%, surpassing leading global platforms such as Nasdaq and ICE. NSE also delivered a fiscal 2024 return on equity of 38.5%, significantly higher than the global average.

As India’s GDP growth, financialisation of savings, and retail participation continue to expand, NSE remains poised to capitalise on the country’s economic trajectory. Analysts estimate the exchange will deliver a revenue and net profit CAGR of 10.3% and 16.8%, respectively, over the period of the financial year ending March 2024 through the financial year ending March 2027. 

The IPO is expected to draw strong investor interest, and with NSE’s combination of growth and profitability, Nuvama has set an unlisted price of Rs 1,800 on the stock.