NSE IPO Valued At Lower PE Than BSE Despite Stronger Revenue And Profit Base

The National Stock Exchange’s (NSE) long-awaited initial public offering (IPO) could come at a valuation of around ₹5 lakh crore, making it one of India’s biggest public issues.

NSE recently filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), paving the way for an IPO estimated to be worth over ₹30,000 crore through an offer-for-sale by existing shareholders.

However, despite being the country’s largest stock exchange by scale and profitability, analysts believe the proposed valuation places NSE at a discount to its listed rival the Bombay Stock Exchange (BSE).

Based on FY26 earnings, NSE is expected to trade at a price-to-earnings (P/E) multiple of about 49, compared with the Bombay Stock Exchange’s (BSE) nearly 67.

BSE shares were trading at ₹4,025.70 on Friday, up 0.28%, taking their gains for 2026 so far to nearly 54%. The exchange’s market capitalisation stood at around ₹1.65 lakh crore.

Why Is NSE Trading At A Discount To BSE?

According to market observers, NSE’s expected valuation implies a 15-20% discount to BSE on an earnings basis. Analysts say this reflects slower growth in NSE’s core business, particularly in derivatives trading, which remains its biggest revenue contributor.

In FY26, NSE reported revenue from operations of ₹16,601 crore, more than three times BSE’s ₹4,834 crore. However, NSE’s operating revenue declined 3.1% year-on-year, while BSE posted a sharp 63.5% increase.

Transaction charge income, a key metric for exchanges, fell 4.3% at NSE to ₹13,057 crore. Revenue from its derivatives segment also slipped 3.7% to ₹11,477.6 crore. In contrast, BSE’s equity derivatives revenue more than doubled to ₹1,127.9 crore, helped by a near doubling in average daily trading volumes.

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BSE Growing Faster Despite Smaller Size

While NSE remains significantly larger, BSE has delivered stronger growth. BSE’s net profit surged nearly 89% in FY26 to ₹2,497 crore, compared with a 15.5% decline in NSE’s profit to ₹12,187.6 crore.

BSE has also narrowed the profitability gap. Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin improved to 64% in FY26 from 51% a year earlier, while NSE’s margin fell to 66.9% from 73.8%.

Despite the valuation gap, market experts expect strong investor interest in NSE’s IPO. Industry veterans believe the listing could attract large institutional and sovereign fund participation, while also giving investors a direct comparison between India’s two leading stock exchanges.

Sources:

The Economic Times

Moneycontrol