A recent valuation report by SharesNservices sheds light on the National Stock Exchange of India (NSE) as it prepares for its anticipated Initial Public Offering (IPO). The comprehensive analysis benchmarks the unlisted NSE against its domestic counterpart, BSE Ltd, and several leading global exchanges, including CME, ICE, Nasdaq, HKEX, LSEG, and Cboe.
Key Findings: Profitability and Financial Strength
The SharesNservices report highlights NSE's exceptional profitability metrics, which rank among the best globally. NSE boasts a impressive Profit After Tax (PAT) margin of 62.9 percent, an EBITDA margin of 76.5 percent, and a return on equity (ROE) of approximately 35 percent. These figures surpass many of its international peers, including CME, ICE, Nasdaq, and LSEG.
BSE also demonstrates strong financial performance, placing it in the top quartile globally with a PAT margin of 52.3 percent, an EBITDA margin of 64 percent, and an ROE of about 31 percent. Both Indian exchanges maintain robust balance sheets, operating debt-free with substantial cash reserves: NSE holds Rs 17,323 crore, while BSE has approximately Rs 3,500 crore.
Growth Dynamics: BSE's Derivatives Surge
While NSE exhibits steady earnings power, the report identifies BSE as having a genuinely higher growth profile, largely driven by significant gains in its derivatives segment. BSE's Futures & Options (F&O) premium turnover has surged by an astounding 1,539 percent over two years, pushing its notional market share to 44 percent, compared to NSE's 56 percent.
For the fiscal year 2026, SharesNservices projects a 73 percent year-on-year PAT growth for BSE, underscoring its rapid expansion. In contrast, NSE's earnings are described as steady, with a base-case growth assumption of 18 percent for forward valuation, against a historical Compound Annual Growth Rate (CAGR) of 33 percent. BSE's base-case growth is set higher at 26 percent, attributed to its smaller base (Rs 2,288 crore versus NSE's Rs 12,188 crore) and ongoing product expansion.
Valuation Methodologies and Comparative Analysis
The report employed seven globally accepted valuation frameworks, including price-to-equity (PE), price/earnings to growth (PEG), discounted cash flow (DCF), EV/EBITDA, EV/Revenue, sum-of-the-parts, and dividend yields. EV/EBITDA was identified as the primary industry multiple for exchange stocks globally, while PEG helps adjust valuations for earnings growth.
Indian exchanges, particularly BSE at 62 percent and NSE at 17 percent, are growing significantly faster than their global counterparts, which typically see growth rates of 6-7 percent. This robust growth, coupled with India being the world's largest derivatives market by contracts and having a demat account penetration of 15 percent (compared to 44 percent in the US), supports premium valuations for these domestic exchanges.
NSE vs. BSE: Investment Outlook
SharesNservices calculated NSE's base-case DCF at Rs 1,908, with a blended fair value of approximately Rs 1,715. Applying a 20 percent IPO premium, the projected value reaches around Rs 2,058, which is close to its current market price of Rs 1,900, suggesting it is essentially fairly valued.
For BSE, the base-case DCF was Rs 3,885, and the blended fair value stood at about Rs 2,971. The report indicates that BSE's current market price trades at a modest 23 percent premium, which is considered acceptable given its 26 percent growth trajectory.
Ultimately, the report concludes that NSE offers a stronger risk-reward proposition. This is attributed to its valuation being close to fair value, best-in-class margins, zero debt, a substantial cash balance, a PE of 32.7 times at a PEG of 1.82 times, and the potential catalyst of an IPO listing in FY27. While BSE's earnings momentum and market share gains support its current pricing, much of its re-rating appears to be already factored in.