Nifty Index Licensing: The NSE Business Behind ETFs

NSE earned ₹151.85 crore from index licensing and data subscription fees in FY2026, up from ₹120.50 crore in FY2025. The business sits behind the Nifty benchmarks used by index funds, exchange-traded funds and other financial products, according to the exchange's September 10, 2026 red herring prospectus.

The figures reveal a revenue stream separate from transaction charges. NSE Indices owns and manages the Nifty family, while customers pay to use indices and related data for specified purposes. The assets held by funds tracking those indices measure adoption of the benchmarks, rather than money owned or managed by NSE itself.

How does NSE make money from Nifty indices?

NSE licenses Nifty indices to customers including stock exchanges, financial institutions, asset managers and brokers. The RHP says customers use them for portfolio benchmarking and to develop products such as index funds, ETFs and structured products.

The business also sells index data subscriptions. That information includes constituent names, identifiers, market capitalisation, weights, prices and other fields used in portfolio construction, performance analysis and risk monitoring.

NSE additionally develops and maintains customised indices for an annual fee. Customers can commission a new index or request modifications to an existing Nifty index, according to the business description on page 229.

These services explain the commercial role of a benchmark provider. Publishing an index level is part of a wider set of intellectual property and data services used by financial market participants.

How large is the Nifty passive investment ecosystem?

Domestic passive funds linked to Nifty indices held ₹8.95 lakh crore as of June 30, 2026. The corresponding total was ₹8.14 lakh crore at March 31, 2026 and ₹7.63 lakh crore at March 31, 2025.

The 274 index funds and 235 ETFs total 509 domestic schemes. The RHP's Redseer-based comparison places Nifty-linked assets at 72.59% of Indian index fund and ETF assets excluding gold and silver, as of June 2026.

That exclusion is part of the definition. The percentage should not be presented as Nifty's share of all Indian mutual fund assets or every kind of ETF.

How quickly did index licensing revenue grow?

Index licensing and data subscription revenue increased by approximately 26.01% in FY2026, calculated from the RHP's unrounded figures. In the June 2026 quarter, it reached ₹44.13 crore, compared with ₹37.80 crore a year earlier.

This was growth from a relatively small base within NSE. The licensing category contributed 0.91% of consolidated operating revenue in FY2026, whereas transaction charges contributed 78.65%.

Both facts matter. The index business had a broad footprint in passive investment products and growing reported revenue, but it was still a much smaller contributor to NSE's income than trading-related fees.

Is ₹8.95 lakh crore revenue or assets managed by NSE?

Neither description is supported by the RHP. The figure is the aggregate assets under management of domestic passive products linked to Nifty indices. The products use the benchmarks; their full asset balances are not NSE licensing income.

The filing separately reports the revenue earned from licensing and data subscriptions. It does not provide a universal fee rate that can be applied to every rupee of the disclosed fund assets.

Dividing total licensing revenue by one period-end AUM figure would also combine different scopes and time measures. Licensing customers extend beyond the domestic passive funds included in that AUM total.

What makes the index business distinct?

The Nifty family covers broad market, sectoral, thematic, fixed income and strategy indices. The flagship Nifty 50 uses a free-float market capitalisation methodology and is rebalanced semi-annually, according to the RHP.

NSE's index business therefore links benchmark design, maintenance and data to financial products built by other organisations. Its FY2026 disclosures show growing licensing revenue and substantial benchmark adoption, while keeping that commercial income separate from the much larger assets held in the funds that track the indices.