At 43 times earnings, NSE valued way higher than its global peers

NSE's ₹4.4 trillion valuation puts it among the world's largest exchanges, but analysts flag rich valuations despite strong growth prospects

National Stock Exchange of India (NSE) made its debut on the BSE last week and ranks among the top dozen firms in terms of market capitalisation. At ₹1,792  per share, it is valued at ₹4.44 trillion, ahead of Titan, Infosys and Kotak Mahindra Bank and nearly three-and-a-half times of BSE. At 43 times FY26 earnings, it is only next to Titan (73x) and Adani Enterprises (100x), but cheaper than its smaller peer BSE. 

NSE made a lacklustre debut at ₹1,800 per share against its issue price of ₹1,785 apiece on Thursday. Just days before, the stock had been trading near the ₹2000 mark in unlisted markets. Now, it is the seventh-largest exchange in the world by market capitalisation, which stood at ₹4.4 trillion on Friday’s close.  

Brokerage Macquarie also said in a report last week that while NSE trades at a 65 per cent P/E premium to international exchanges, it delivers about 60 per cent higher growth and returns, supported by India’s structural financialisation tailwinds. It has a 12-month target of ₹1,965 for the stock, implying 9.6 per cent upside from Friday’s close at ₹1,792.65. 

Based on a PL research report, NSE is expected to grow at 11 per cent annually for the next three years. At 43 times earnings the valuation appears to be expensive.  On the other hand, ICE (NYSE) is expected to grow at 12 per cent and Nasdaq at 13 per cent for the same period  but trade at a P/E multiple of around 25 times. 

“We believe the positives are largely priced into NSE, despite its attractive long-term structural story, supported by rising financial inclusion,” said Aniruddha Sarkar, cofounder & CIO, Equinova Investment Managers.  

Vikas Gupta, CEO at OmniScience Capital, said he does not see regulatory actions as a major risk to NSE’s volumes. Any impact on volumes following regulatory actions, he said, may be transitory, with volumes likely to normalise over a few quarters as India’s financial-market penetration continues to rise. 

Elios Financial Servces’ Sham Chandak, head of institutional equities said that NSE at current market cap is at a significant premium to other global exchanges because of its superior margins, demonstrated high growth for a long period of time, and dominant market share. 

However, some remain skeptical about the NSE’s near-term growth prospects.