The much-anticipated Initial Public Offering (IPO) of the National Stock Exchange of India (NSE) has officially opened for subscription, marking a significant event in India's capital markets. With an impressive issue size of Rs 22,561.57 crore, this share sale stands as India's second-largest, following Hyundai Motors. The IPO will remain open until Monday, September 21, providing investors a window to participate.
A day prior to the public opening, the NSE successfully raised Rs 6,746.18 crore from 189 anchor investors, securing investments at the upper end of its price band. Shares are being offered within a price range of Rs 1,700 to Rs 1,785 per equity share, with a minimum bid of eight shares per lot. This translates to a minimum investment of Rs 14,280 at the upper price limit for a single lot.
Understanding NSE's Key Financials and Valuation
Before considering a subscription, a closer look at the key financial indicators of India's largest bourse by volumes is essential. The valuation metrics present a dynamic picture for potential investors.
Valuation Ratios: A Shifting Landscape
NSE's valuation ratios have shown notable fluctuations. The Enterprise Value to Sales (EV/Sales) multiple, for instance, declined from 27.9 times in FY24 to 23.8 times in FY26, but then sharply increased to 101.5 times in Q1FY26 and remained high at 87.3 times in Q1FY27. Similarly, EV/EBITDA decreased from 35.6 times in FY24 to 31.3 times in FY26, before jumping to 130.7 times in Q1FY26 and 112.1 times in Q1FY27. The Price-to-Earnings (P/E) ratio followed a similar pattern, falling from 52.9 times in FY24 to 42.4 times in FY26, only to surge to 157.1 times in Q1FY26 and 143.9 times in Q1FY27. Conversely, the Price-to-Book Value (P/BV) ratio has seen a steady decline, moving from 18.4 times in FY24 to 12.5 times in Q1FY27.
Revenue and Profit Growth Trajectories
NSE's consolidated sales grew by 16% from Rs 14,780 crore in FY24 to Rs 17,140.7 crore in FY25. However, FY26 saw a slight reversal, with sales decreasing by 3.1% to Rs 16,601.3 crore. A recovery was evident in the June quarter (Q1FY27), where sales rose 13.1% year-on-year to Rs 4,560.4 crore.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also saw strong growth, increasing 10.9% from Rs 11,610.8 crore in FY24 to Rs 12,881 crore in FY25, before a 2.1% decline in FY26. Q1FY27 brought a rebound, with EBITDA climbing 13.5% year-on-year to Rs 3,550.9 crore.
Profit After Tax (PAT) reported an increase from Rs 8,406.5 crore in FY24 to Rs 11,605.7 crore in FY25, then dipped to Rs 10,179.5 crore in FY26. The most recent quarter, Q1FY27, showed positive growth, with reported PAT rising to Rs 3,131.9 crore.
Operational Efficiency and Capital Returns
The exchange demonstrates a high-margin business model, though some moderation in net profitability was observed in the latest quarter. The EBITDA margin stood at 78.6% in FY24, dipped to 75.1% in FY25, then recovered to 76% in FY26 and 77.9% in Q1FY27. Similarly, the EBIT margin moved from 75.6% in FY24 to 72% in FY25, recovering to 72.2% in FY26 and 74.3% in Q1FY27. The net profit margin, while strong, saw a slight moderation to 67.3% in Q1FY27 from 69.7% in Q1FY26.
Return on Equity (ROE) improved from 34.8% in FY24 to 39.4% in FY25 before falling to 33.3% in FY26. Quarterly ROE was 9% in Q1FY27. Return on Capital Employed (ROCE) declined from 46.4% in FY24 to 37.8% in FY26, showing a marginal improvement to 8.8% in Q1FY27.
Strong Liquidity and Zero Debt
A standout feature of NSE's financial health is its robust liquidity position. The current ratio consistently remained well above the ideal range, improving from 8.8 times in FY24 to 11.3 times in FY26, before moderating to 7.7 times in Q1FY27. The quick ratio followed a similar trend, peaking at 8.5 times in FY26 and settling at 4.8 times in Q1FY27, both indicating strong short-term liquidity.
Perhaps the most compelling aspect of NSE's balance sheet is its virtually absent debt. The adjusted debt-to-equity ratio has been zero across all reported periods (FY24, FY25, FY26, Q1FY26, and Q1FY27), underscoring a highly de-risked financial structure.
Conclusion for Investors
While annual valuation multiples like EV/Sales, EV/EBITDA, and P/E have shown moderation over recent fiscal years, the quarterly data can present a magnified view due to its shorter reporting period. This makes a thorough assessment of the IPO's valuation crucial for investors, alongside the National Stock Exchange's otherwise strong financial performance, impressive liquidity, and notable zero-debt status.