The National Stock Exchange of India (NSE) began life as a publicly traded company on Thursday, 24 September, ending a decade-long struggle to list and putting a market price on the institution that dominates trading in Indian stocks and derivatives.

NSE shares listed on BSE at ₹1,800, just 0.84% above the ₹1,785 initial public offer (IPO) price, before moving higher during the session. The stock rose as much as 5.2% to ₹1,878 in early trading and was up about 3.5% around midday. The IPO price valued the exchange at roughly ₹4.42 trillion, or about $46 billion.

The relatively restrained debut came after investors placed bids worth more than $10 billion for the offering. The ₹22,561.57 crore, or roughly $2.35 billion, IPO was subscribed 5.71 times, with qualified institutional buyers bidding for 12.68 times the shares reserved for them.

It was India’s second-largest IPO, behind Hyundai Motor India’s $3.3 billion offering. The offering was entirely an offer for sale, with existing shareholders selling about 126.4 million shares. NSE received no fresh capital from the IPO.

The listing carries an unusual twist. NSE cannot list on its own exchange and its shares are therefore trading on BSE, the older rival whose once-dominant position in Indian equities NSE rapidly eroded after starting electronic trading in the 1990s.

Today, NSE accounts for about 93% of India’s cash-equities market and roughly 75% of the options market.

At the IPO price, NSE was valued at about $46 billion, making it substantially more valuable than India’s other listed exchanges. Shortly after trading began, its market capitalization reached about ₹4.62 trillion, placing it among the 10 largest companies trading on BSE at the time.

The valuation also dwarfs those of its listed exchange peers. At the start of Thursday’s session, BSE, Multi Commodity Exchange of India and Indian Energy Exchange together had a market capitalization of about ₹2.28 trillion, roughly half NSE’s value.

A decade getting to market

NSE’s listing comes after years in which regulatory investigations repeatedly obstructed its plans to go public. The exchange first sought to list about a decade ago, but investigations into whether some high-frequency traders received preferential access to its co-location facilities became a major obstacle.

Co-location allows trading firms to place their computer servers inside or very close to an exchange’s own data center. That cuts the time needed for an order to reach the exchange, an advantage measured in fractions of a second but potentially worth substantial sums to high-frequency traders. The controversy centered on allegations that some brokers were able to connect to NSE’s systems faster or more consistently than others, raising questions about whether all market participants were being given fair access.

The related dark-fiber case involved dedicated high-speed communication links used by brokers to connect to NSE. Regulators examined whether access to those faster connections had been provided in a way that favored some trading members. The disputes produced years of regulatory orders, appeals and court proceedings and became a major obstacle to NSE’s planned IPO.

That long-running legal overhang was largely cleared shortly before NSE’s shares began trading. The Supreme Court disposed of Sebi’s’s appeals relating to the co-location and dark-fiber disputes in early September, after the regulator had agreed in principle to settlements. NSE then disclosed settlements in the dark-fiber matter on 4 September and the co-location case on Wednesday, 23 September, one day before its market debut.

Those cases formed part of the regulatory baggage hanging over an institution that had otherwise become central to India’s transformation into one of the world’s most active securities markets.

The IPO consequently marks more than a new stock-market listing. It draws a line under a prolonged period in which one of India’s most important financial institutions remained privately held while companies trading on its platforms created trillions of dollars of market value.

Derivatives built the franchise

NSE’s scale has been built partly on India’s extraordinary appetite for equity derivatives. The exchange is the world’s largest derivatives venue by the number of contracts traded, and options have become an important source of its revenue. The Financial Times reported that equity options accounted for 77% of NSE’s transaction revenue in the latest financial year.

That dependence is also one of the principal risks confronting the newly listed company. The Securities and Exchange Board of India (Sebi) has tightened rules governing equity derivatives in response to concern about losses among retail traders. Measures introduced since 2024 have included changes to contract sizes and expiry structures and other restrictions aimed at curbing speculative activity.

Trading volumes have weakened from their earlier pace as those rules have taken effect, while NSE’s net profit fell 15%.

The regulatory changes help explain why the IPO’s reception, though strong by conventional standards, was less frenzied than several other recent Indian offerings.

NSE’s 5.71-times subscription was well below the roughly 39-times average for Indian IPOs this year. International demand was also more restrained than domestic institutional interest.

There was another unusual factor heading into Thursday’s debut: only about 5.48% of NSE’s pre-offer capital was expected to be freely tradable immediately after listing, Reuters reported. The limited supply of shares had led traders to expect that even modest demand could produce relatively large price movements.

Instead, the opening itself was quiet. Shares began trading only ₹15 above the upper end of the IPO price band before gaining ground as the session progressed.