OPTIONS SLOWDOWN TESTS VALUATION
The NSE has seen a bottom-line impact from its reduced derivative trading volumes. The exchange’s revenue from operations fell 3.1 per cent in the fiscal year ending March 2026, while profit dropped 15.5 per cent.
According to Bernstein, Indian equity derivatives volumes are entering a phase of normalisation and they forecast growth will slow to about 5 per cent in the fiscal year ending in 2027 due to regulatory measures on options trading.
Still, the NSE’s IPO valuation implies a forward earnings multiple of 35 to 38 times FY2028 earnings, higher than the 23 to 31 times earnings global exchange operators Nasdaq, CME Group, Deutsche Börse, HKEX and LSEG currently trade.
“The current pricing is factoring, options trading slowdown due to regulatory tightening and initial teething issues in the new mechanism to determine closing prices. Perhaps had the IPO launched at any other time, valuation could have been better,” said Anubhav Dayal, founder of Hong Kong-headquartered fund manager Soach Global Corporation.
His flagship fund is selling 20 per cent of its NSE holding in the offering.
In the past 15 months, the NSE has launched electricity futures, electronic gold receipts, natural gas futures and incorporated a national coal exchange.
On Saturday, NSE’s Krishnan pointed to these efforts as positives that outweigh any short-term concerns around derivative volumes.
“In the longer term, there will be so much diversification of revenue and as a natural consequence people will forget this current focus on index options,” he said.
