The National Stock Exchange IPO has moved closer to reality with market regulator SEBI in advanced stages of providing the No-Objection Certificate. Market expert Gurmeet Chadha from Complete Circle positions the upcoming public offering as a long-term compounding story rather than a listing-day trading opportunity.

Current Valuation and Market Position

NSE has demonstrated significant price movement in the unlisted market over recent years. The current trading dynamics reflect investor interest ahead of the public debut.

Chadha notes that at current levels, the stock trades at nearly 40 times earnings, indicating valuations that are "not very cheap" but remain attractive for patient investors. The exchange commands approximately 90% market share across several categories including cash markets, bulk deals, and derivatives.

Investment Perspective and Growth Trajectory

The Complete Circle Managing Partner emphasizes realistic expectations for future returns. NSE has already delivered multi-bagger gains since 2019, but the pace of exponential returns naturally moderates as the business scales up. Customer addition has accelerated sharply in recent years, though the larger base makes 10x returns unlikely from current levels.

"If you have to enter NSE, you have to take a more three to five-year view in terms of holding the stocks. It is a great stock to hold for long-term," Chadha stated. He expects strong interest from large institutions, endowment funds, and long-only investors, describing NSE as a "25-30% compounding machine."

Comparative Valuation Analysis

While NSE's valuation appears reasonable compared to local peers, global comparisons present a different picture. Most international exchanges including Nasdaq and London Stock Exchange trade at cheaper valuations relative to NSE's current metrics.

Business Fundamentals and Diversification

Recent quarterly performance showed profit softness, which Chadha attributes to one-off settlement-related costs and high base effects rather than core business weakness. Transaction charges continue to account for a large revenue share, though NSE is gradually diversifying through new products and platforms.

Emerging growth opportunities include:

• Electricity futures development
• Growing traction on MF Platform 2.0
• Value creation through subsidiaries like NSE Academy
• GIFT City operations expansion

Chadha believes short-term volatility around quarterly numbers should not concern long-term investors, given the robust underlying business fundamentals and the exchange's dominant market position across multiple segments.

The National Stock Exchange of India (NSE), the country's largest stock exchange, is preparing to file its draft IPO prospectus by the end of March 2026, marking a significant milestone in its prolonged journey toward public listing. SEBI Chairman Tuhin Kanta Pandey recently stated that the regulator is in advanced stages of granting the No Objection Certificate (NOC) for NSE's initial public offering, with the possibility of approval as early as January 2026.

Regulatory Progress and Timeline

The exchange is currently in early discussions with investment bankers and law firms to prepare the prospectus and assess investor interest. However, NSE has not yet disclosed the quantum of equity that will be offered to the public. The company's unlisted shares currently value NSE at approximately $55 billion. Formal appointments of advisors will be made after SEBI issues the no-objection certificate.

Prolonged Listing Journey Since 2016

NSE's IPO journey began in 2016 when it first filed draft papers with SEBI, but the process has been significantly delayed due to regulatory investigations and legal challenges. The primary obstacle has been allegations of unfair trading practices related to its co-location facilities, which allow traders to place servers physically close to the exchange's servers for faster market data access.

Key Regulatory Milestones

Recent Financial Performance

NSE's financial results for Q2 FY26 reflected the impact of regulatory settlements. The exchange reported a 33% year-on-year decline in consolidated profit after tax, falling to ₹2,098.00 crore from ₹3,137.00 crore in the same quarter of the previous year.

The ₹1,297.00 crore provision, including interest, was recognized in Q2 FY26 in connection with settlement applications related to co-location and dark fiber matters. After adjusting for this provision, NSE's adjusted PAT stood at ₹3,396.00 crore, reflecting a 16% sequential increase compared to the previous quarter.

Path Forward

With SEBI Chairman Pandey's recent statement that "no obstacle remains" in the way of NSE's IPO, the exchange appears to have cleared most major regulatory hurdles. The settlement applications filed with SEBI, totaling around ₹1,388.00 crore, are seen as removing the primary barriers to the IPO process. Once the NOC is granted, NSE plans to file its Draft Red Herring Prospectus (DRHP) and proceed toward listing, potentially ending nearly a decade-long wait for one of India's most anticipated public offerings.