NSE IPO 2026: Jefferies flags 90%+ market share

Why NSE’s proposed listing is back in focus

The National Stock Exchange’s (NSE) proposed initial public offering is being tracked closely after global brokerage Jefferies said the listing could complete the “troika” of listed Indian market infrastructure institutions. Jefferies’ central point is that NSE’s scale in multiple trading and clearing segments, alongside high profitability, positions it strongly if and when it lists. The brokerage also argued that NSE is more diversified than domestic peer BSE, and that it holds over 90% market share across most business lines.

The renewed attention comes as research notes from multiple firms and disclosures in NSE’s draft red herring prospectus (DRHP) have put concrete operating metrics into the public domain. These include market share data across cash equities and derivatives, profitability indicators, and how one-off regulatory settlements have affected reported earnings.

Jefferies: dominance across most segments drives resilience

Jefferies said NSE’s dominance spans equity cash, equity futures, single-stock options, bonds, currency derivatives, and other categories. The report added that the exchange has over 90% market share in most segments and also runs a growing technology and data business.

Jefferies also stated that NSE accounts for around 70% of Indian exchange revenues. It described NSE as among the most diversified peers, with offerings across equity cash, index options, single-stock options, equity futures, commodity futures and options, bonds, and currency derivatives. Jefferies noted exceptions to the “over 90%” claim in index options and commodity F&O, while also highlighting that NSE is expanding its presence in commodity F&O.

Clearing strength: NSE Clearing’s share in cash and F&O

A key support for the exchange franchise is clearing, where scale can translate into operating leverage. Jefferies said NSE Clearing Ltd (NCL) has an 88% market share in cash and a 91% market share in F&O. These figures matter because clearing and settlement capacity underpins confidence in transaction-heavy markets and helps support the broader product ecosystem.

Centrum Institutional Research also pointed to NSE’s infrastructure edge, including an integrated risk architecture anchored by a Core Settlement Guarantee Fund of about ₹13,080 crore.

Profitability: stable margins after adjusting for settlement costs

Jefferies said regulatory settlements linked to SEBI’s co-location and dark fibre matters weighed on reported earnings in the past two financial years. It argued that the underlying business remained resilient, and that excluding regulatory expenses, NSE is among the most profitable exchanges globally.

Jefferies pegged normalised operating EBITDA margins at 76% to 77% during FY24 to FY26. The brokerage highlighted specific one-off provisions and payments that reduced reported profitability, including provisions related to the colocation and dark fibre case (FY26: ₹1,390 crore) and payment of ₹670 crore in the TAP matter in FY25.

A separate comparison point in the broader research commentary noted that in the first half of FY26, NSE reported operating margins of 77%, compared with 65% for BSE.

Cash flows, capex discipline, and dividend payouts

Jefferies described NSE’s balance sheet as strong, supported by healthy operating cash flows. It also highlighted low capital expenditure, estimated at around 3% to 3.5% of revenues.

That combination enabled a high payout profile. Jefferies said NSE distributed 74% of earnings as dividends in FY25 and 85% in FY26. The ability to maintain high payouts while keeping capex contained is often interpreted as evidence of operating leverage in market infrastructure businesses, although the sustainability of payouts ultimately depends on volumes, competition, and regulatory requirements.

Technology and data: a growing revenue contributor

Beyond transaction and clearing-linked earnings, Jefferies pointed to a technology and data business that is increasing in relevance. It said NSE’s suite of technology and data offerings contributed 13% of FY26 revenues.

The DRHP also described an operating model with relatively low non-volume-linked expenses and diversified business lines across equities, derivatives, fixed income and commodities, along with listing, clearing, and ancillary services. It noted that low marginal costs can support product expansion, citing the launch of electricity futures in July 2025.

DRHP metrics: income, profits, and global standing

As per the DRHP, NSE reported total income of ₹18,713.37 crore in FY26, compared with ₹16,352.06 crore in FY24. The exchange also reported a net profit of over ₹10,300 crore in FY26.

On market leadership, the DRHP said NSE had market share as high as 92.99% in India’s cash market (by total turnover), 99.79% in equity futures (by total turnover), and 74.71% in equity options (by premium turnover). It also stated that NSE retained its position as the world’s largest derivatives exchange by number of contracts traded for seven consecutive years as of March 31, 2026.

The DRHP further cited global metrics: a global market share of 11.38% in cash equities trades and 51.18% in equity derivatives contracts traded in FY26, alongside World Federation of Exchanges references about scale.

Valuation discussion: Centrum’s scenario framework

Centrum Institutional Research framed NSE as a “behemoth” and cited FY26 segment leadership including about 93% market share in cash equities, nearly 100% in equity futures, and roughly 72% in equity index options turnover.

Centrum also provided a valuation construct: assuming a market capitalisation of ₹5,00,000 crore, implied valuation works out to around 36x FY28E EPS under its base case and about 35x under its bull case. It described this as a rich multiple for a high-margin, high-ROE exchange franchise.

On growth, Centrum noted revenue from operations grew at a 24% CAGR over FY21 to FY26, with EBITDA and net profit rising at a 23% CAGR. It added that margins were consistently above 70% and ROE above 30%, even after a softer FY26. Centrum’s projection in the note said net profit is expected to grow at about 16% CAGR over FY26 to FY28E, with earnings momentum expected to recover from FY27 onwards.

Market impact: what investors typically track for an exchange IPO

For an exchange business, transaction-led income and market share are key operational drivers. Centrum said transaction-led income contributed nearly 80% of operating revenue in FY21 to FY26. It also highlighted the deepening of the cash market, with turnover rising from ₹50 trillion in FY16 to ₹280 trillion in FY26.

However, the Jefferies note also showed how regulatory outcomes can create earnings noise even when the core business is stable. NSE’s DRHP explicitly flagged risk factors including regulatory oversight, dependence on trading volumes, and technology-related risks.

Separately, Jefferies’ broader market commentary for India highlighted earnings growth as a major determinant of stock performance in 2026, and Reuters cited Jefferies saying domestic investment flows averaged about $1 billion to $1 billion per month. While those comments are not specific to NSE, they frame the broader equity market environment in which a large listing would be evaluated.

Key metrics at a glance

What the story means going forward

Across reports, the common thread is that NSE combines high market share with high margins, aided by operating leverage and a large clearing footprint. The debate, based on the notes cited, shifts from business quality to how investors price regulatory overhangs, volume sensitivity, and valuation multiples implied by different market-cap scenarios.

NSE’s DRHP also makes clear that the exchange views product expansion, technology, and continued capital-market participation as key pillars, while acknowledging oversight and operational risks. Any next steps on the IPO will be judged against these disclosed metrics, alongside the timing and clarity around regulatory matters.