NSE IPO 2026: DRHP strengths, risks and key data

A decade-long listing plan moves forward

India’s largest stock exchange, the National Stock Exchange of India (NSE), has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO). The filing revives a listing plan that dates back to 2016 and was repeatedly delayed amid regulatory scrutiny. For investors, the key takeaway is that the proposed issue is structured entirely as an offer for sale (OFS), meaning NSE will not raise fresh capital through the IPO.

Market participants have tracked NSE for years as one of the most actively traded unlisted names in private or off-market deals. Deepak Jasani, an independent market expert, said the issue is likely to attract strong interest from IPO investors and that listing may reduce uncertainty around valuation and settlement practices that typically exist in unlisted share transfers.

Offer structure: pure OFS with no fresh proceeds

The DRHP describes a transaction where existing shareholders collectively divest around 6% of NSE’s paid-up capital. A separate report in the provided material states the OFS is for up to 149 million equity shares (149 million shares), which is also described as 6% of the paid-up capital. Because it is a pure OFS, proceeds will go to the selling shareholders, not NSE.

The material also notes that NSE will not use any IPO proceeds for business operations, capital expenditure, debt repayment, acquisitions, or any other corporate purpose. This structure can shape how investors read the IPO: the focus shifts to regulatory readiness, governance history, business resilience, and valuation rather than fundraising plans.

Who is selling: SBI leads, LIC holds on

Shareholder participation is broad and largely institutional in the reporting included. State Bank of India (SBI) is described as the largest selling shareholder, offering up to 2.48 crore shares (24.75 million). Other sellers named include Canada Pension Plan Investment Board, affiliates of Morgan Stanley, Temasek, Bank of Baroda, Stock Holding Corp. of India, General Insurance Corp. of India, The New India Assurance Co, National Insurance Co and United India Insurance Co.

The same material states that LIC, NSE’s single-largest shareholder with a 10.72% stake, is not selling. It also notes that Premji Invest (2.35%) and Radhakishan Damani (1.58%) are not divesting in the IPO, as per the DRHP.

Where NSE will list, and why it matters

Under current market regulations cited in the material, an Indian stock exchange cannot list its shares on its own platform. As a result, NSE is expected to list on rival BSE Ltd. This creates a rare setup where the country’s largest exchange, once public, will have its shares traded on its competitor’s venue.

The IPO syndicate is described as large, with a record 20 investment bankers. Kotak Mahindra Capital Co. and Morgan Stanley India Co. are among the book-running lead managers.

DRHP strengths: leadership, scale and global standing

In the DRHP-based details provided, NSE positions itself as a market leader across segments. It said it was the largest stock exchange in India in total turnover in the cash market and equity derivatives segment (based on notional turnover for equity options) from FY2016 to FY2026. It also stated it remained the largest exchange in India for exchange-traded currency derivatives from FY2009 to FY2026, citing the Redseer Report.

The filing also cites global rankings. According to the World Federation of Exchanges data referenced, NSE was the largest multi-asset class exchange globally in terms of number of trades in cash equities and contracts traded in equity derivatives in FY2026. The DRHP material reports a global market share of 11.38% in cash equities trades and 51.18% in equity derivatives contracts traded. As of March 31, 2026, NSE said it retained its position as the world’s largest derivatives exchange by number of contracts traded for seven consecutive years.

Innovation, infrastructure and newer products

NSE highlights its role in technology-led market structure changes, including the NEAT electronic trading platform introduced in 1995. It also points to settlement cycle initiatives, stating that its clearing arm has transitioned to T+1 settlement and introduced T+0 settlement.

On product expansion, NSE cites the launch of electricity futures in July 2025 and reports a 71.38% market share in electricity futures between July 14, 2025, and March 31, 2026. It also states that its proprietary technology infrastructure supports high-speed and high-frequency transactions and enables rapid implementation of regulatory directives.

Key risks: regulation, volumes and technology

The DRHP flags continuous regulatory supervision by Sebi, the Reserve Bank of India (RBI) and other regulators, along with inspections, audits and compliance requirements. It also discloses that Sebi has previously issued observations, show-cause notices, administrative warnings, deficiency letters and advisory communications to the exchange.

Legal and enforcement uncertainty is another stated risk. NSE disclosed it has been subject to enforcement actions, penalties and adjudication proceedings relating to alleged regulatory violations, and said outcomes of ongoing and future proceedings remain uncertain.

Operationally, NSE describes heavy dependence on technology and third-party service providers. The DRHP refers to the February 24, 2021 incident that halted trading for nearly five hours and 24 minutes due to telecom connectivity issues affecting critical systems. It also lists cyber threats such as phishing, ransomware, denial-of-service attacks and data breaches.

Revenue sensitivity and derivatives concentration

The filing and reports emphasise that NSE’s earnings are sensitive to trading volumes because a significant portion of revenue comes from transaction charges. It also flags revenue concentration in derivatives, stating a substantial share of transaction revenue is derived from options and futures trading.

Deepak Jasani said regulatory focus on derivatives could affect NSE more than BSE because of NSE’s higher dependence on trading volumes. The material also notes Sebi measures introduced in 2024 and 2025 to strengthen the derivatives framework, which have affected trading activity.

Financial snapshot and recent trend

The provided material contains multiple reported financial figures. One DRHP-linked section states NSE reported total income of ₹18,713.37 crore in FY2026 compared with ₹16,352.06 crore in FY2024. Another report states NSE reported a 3% year-on-year decline in revenue in FY2026 and a 15% drop in profit.

That report puts FY2026 revenue at ₹16,601 crore (down from ₹17,141 crore), and FY2026 profit at ₹10,302 crore. It further states income from transaction charges fell 4% year-on-year to ₹13,057 crore (from ₹13,636 crore) and clearing and settlement income fell 22% to ₹251 crore (from ₹321 crore), attributing the decline to moderation in trading activity alongside higher expenses and exceptional or regulatory-related items disclosed in the DRHP.

Valuation talk, grey market cues, and the BSE comparison

Grey market references in the provided text peg the IPO at roughly ₹29,780 crore, with valuation seen at over ₹5,00,000 crore (₹5 trillion). A separate line in the material describes valuation expectations in a broader range of ₹4,00,000 crore to ₹6,00,000 crore (₹4 trillion to ₹6 trillion).

The same reporting compares NSE’s potential listing to BSE, which listed in 2017. It notes BSE shares have risen over 50% over the past 12 months and trade at a price-to-earnings multiple of 70.45. On a referenced Wednesday session, BSE shares fell 3.81% while the Nifty index rose 0.4%.

Key facts table

Background: why the listing was delayed

NSE’s listing plans date back to 2016 and were delayed amid regulatory scrutiny linked to the co-location and dark fibre matters. The material notes that Sebi had advised NSE to withdraw its earlier proposal. Under new management, NSE reached a settlement with Sebi in January 2026 for ₹1,300 crore and received the go-ahead to refile its papers.

A legal expert quoted in the provided material, Rohit Jain (Singhania & Co.), said Sebi’s formal observation period is 30 days from receipt of satisfactory clarifications and exchange in-principle approvals, but that NSE’s review is unlikely to be “plain-vanilla” given its market-infrastructure status and past regulatory overhang.

Conclusion: what to watch next

The DRHP filing brings NSE closer to a public listing after nearly a decade of stops and starts. With the IPO structured as a pure OFS, investor attention is likely to remain on regulatory outcomes, trading-volume sensitivity, technology resilience, and how the final price band and timeline evolve through Sebi’s review process.