Its $2.3 billion initial public offering on the National Stock Exchange of India received an enthusiastic response from investors, attracting bids of more than $10 billion despite its high price-to-earnings ratio, and its stock price outperforming several companies on the US stock exchanges. Nasdaq.
Buoyed by strong demand from institutional investors and high-net-worth buyers, the NSE IPO on Monday secured bids for 505.81 million shares, 5.7 times the 88.64 million shares on offer.
As part of its IPO, the company last week raised 67.5 billion rupees ($704 million) from major investors including the Monetary Authority of Singapore, the Abu Dhabi Investment Authority and India’s largest life insurance company. Life Insurance Corporation of India.
The NSE IPO is the country’s biggest listing so far this year and the second-largest in history after Hyundai Motor India’s $3.3 billion initial public offering in 2024.
The proposed takeover is one of the most anticipated large-scale listings in India this year, and has been in the works since 2016. This business will provide investors with a strong push to expand retail participation in India’s capital markets.
According to the country’s Economic Survey released earlier this year, stock investments, which were once just a part of household balance sheets, have become “an important component of financial assets.” According to the report, the share of annual household savings held by stocks and mutual funds increased from 2% in the fiscal year ending March 2012 to 15.2% in the fiscal year ending March 2025.
India is among the world’s top 10 stock markets, with a market capitalization of approximately 492 trillion rupees ($5.1 trillion), and the NSE is the main exchange. According to the IPO filing, the company has a 93% share of India’s spot market and nearly 100% of the country’s stock futures trading, along with 75% of stock options trading.
Indian brokerage firm Geojit Financial Services said in a September 16 report that NSE’s “asset-light business model enables consistently high profit margins and cash generation,” and urged investors to subscribe for the IPO.
The report added that greater capital market participation and “increasing financialization” in India has provided a “strong long-term growth runway” for the NSE.
A report by Indian brokerage firm Yes Securities values the NSE at a price-to-earnings ratio of 42.9 times based on the upper end of the IPO price band and earnings per share for the year ending March 2026.
By contrast, the world’s largest stock market, the U.S. stock exchange, has a price-to-earnings ratio of less than 24 times. The price/earnings ratio of Nasdaq is 23.6 times. intercontinental exchange The stock trades at 21.9x, according to LSEG data.
Early this year, bombay stock exchange NSE’s rival BSE said that despite a large exodus of foreign investors, the Indian market is protected from freefall due to increased participation of domestic investors.
He said 35 million Indian investors will be registered on the platform in 2025, with a “significant population” yet to enter the capital markets.
