The much-awaited IPO of the National Stock Exchange of India (NSE) opens for subscription on September 17, with investors eyeing one of India's largest public offerings even as its grey market premium (GMP) has declined sharply ahead of the issue opening.
Investors closely monitor GMP because it provides an early indication of the premium at which an IPO is being traded in the unofficial market and, by extension, the listing gains that investors may anticipate.
However, GMP is only an unofficial indicator and does not assure a particular listing price. A steep decline in the GMP can suggest that expectations of a listing premium have weakened.
The Rs 22,561.57 crore NSE IPO is entirely an offer for sale (OFS), involving 12.64 crore shares sold by existing shareholders. NSE will not receive any money from the issue. The IPO will remain open until September 21, while allotment is expected on September 22 and the shares are tentatively scheduled to list on the BSE on September 24.
The price band has been set at Rs 1,700-1,785 per share, with a lot size of eight shares. A retail investor applying at the upper end of the price band would therefore need Rs 14,280.
Despite the strong interest surrounding the issue, NSE's GMP has dropped considerably.
NSE IPO GMP SEES SHARP DECLINE
As of 6:58 am on September 17, the latest available GMP for the NSE IPO stood at Rs 125.
At the upper price band of Rs 1,785, this points to an estimated listing price of approximately Rs 1,910, representing a premium of about 7% over the issue price.
This marks a substantial decline compared with the previous week.
The GMP was Rs 218 on September 11. It subsequently stood at Rs 208 on September 12, Rs 210 on September 13, Rs 208 on September 14, Rs 160 on September 15, Rs 145 on September 16 and Rs 125 on September 17.
As a result, the GMP has dropped by Rs 93, or roughly 43%, from Rs 218 on September 11 to Rs 125 on the morning the IPO opens.
The implied listing premium has also fallen from above 12% last week to around 7%.
Investors should note that GMP is an unofficial market measure and cannot guarantee the eventual listing price or returns.
NSE IPO DETAILS
The NSE issue is a book-built IPO carrying a price band of Rs 1,700-1,785 per share. The total issue is valued at Rs 22,561.57 crore and consists entirely of an OFS of up to 12.64 crore equity shares.
Qualified institutional buyers (QIBs) have been allocated 50% of the issue, while 15% is reserved for non-institutional investors and 35% for retail investors. Each lot consists of eight shares.
Bidding for the IPO will close on September 21, with September 24 set as the tentative listing date.
NSE has already received considerable interest from anchor investors. On Wednesday, shares worth Rs 6,746 crore were allotted to anchor investors at Rs 1,785 per share, which is the top end of the price band.
WHY IS THE NSE IPO SIGNIFICANT?
NSE has a leading presence in India's capital markets.
According to Angel One's IPO report, NSE had 261.36 million registered investor accounts and 132.37 million unique registered investors as of June 30, 2026. The exchange had 1,328 trading members and 3,005 listed companies, whose combined market capitalisation stood at Rs 474.08 trillion.
Its position is particularly strong in the derivatives segment. During FY26, NSE accounted for 92.99% of the cash market, 99.79% of equity futures, 74.71% of equity options based on premium turnover and 99.48% of currency futures, according to Angel One.
The exchange's operations also go beyond trading. NSE offers services across equity cash, derivatives, currencies, commodities and debt markets, while its broader ecosystem covers clearing, indices, market data and analytics, and international exchange operations.
Religare has also highlighted NSE's vertically integrated business structure, spanning trading, clearing, settlement, listings, market data and index services.
NSE'S FY26 EARNINGS DECLINED
One of the key concerns for investors is the moderation in NSE's financial performance during FY26.
Revenue from operations declined to Rs 16,601.31 crore in FY26 from Rs 17,140.68 crore in FY25. Profit after tax also dropped to Rs 10,302.06 crore from Rs 12,187.69 crore.
Operating EBITDA fell from Rs 12,646.88 crore to Rs 11,097.90 crore, while the EBITDA margin declined from 73.78% to 66.85%.
Angel One said the decline was partly linked to regulatory changes affecting derivatives and an increase in securities transaction tax (STT), both of which impacted activity in equity options. It noted that the notional average daily traded volume in equity options fell from Rs 312.84 trillion to Rs 258.28 trillion.
There are signs of improvement in the most recent quarter, however.
During Q1FY27, operating revenue grew 13.10% year-on-year to Rs 4,560.41 crore. Operating EBITDA increased 14.84% to Rs 3,594.25 crore, while profit after tax rose 6.71% to Rs 3,120.08 crore.
WHAT ARE BROKERAGES SAYING ABOUT THE IPO?
Brokerage views on the issue are not uniform.
Angel One has recommended subscribing to the IPO. Its analysis highlights NSE's leading market position, substantially higher revenue and profitability compared with BSE, strong dominance in equity derivatives and the long-term expansion potential of India's capital markets.
The brokerage has also pointed to NSE's valuation. At the upper price band of Rs 1,785, it estimates a post-issue P/E ratio of 35.4 times, compared with 54.2 times for BSE.
Religare Broking, in contrast, has given the IPO a Neutral rating.
Its report values NSE at a P/E of 42.9 times and notes that the valuation reflects the exchange's established market position and future growth prospects, while also leaving “limited room for earnings disappointments”.
Religare's main concern is NSE's dependence on trading activity, especially options trading.
The brokerage said regulatory developments affecting options trading remain an important factor for transaction-based revenue. It also identified regulatory uncertainty, fluctuations in trading activity and potential technology or cybersecurity disruptions as risks.
SHOULD INVESTORS SUBSCRIBE?
The brokerage reports highlight different factors that investors may need to consider.
Angel One said NSE's valuation at the upper price band of Rs 1,785 works out to a post-issue P/E of 35.4 times, compared with 54.2 times for BSE. It cited NSE's dominant market position, higher revenue and profitability, strong equity derivatives market share and the long-term structural expansion of India's capital markets as factors supporting the issue.
The brokerage added that although derivatives volumes face near-term regulatory challenges, it believes the valuation provides a favourable entry point because of NSE's competitive position and earnings potential.
The positive investment argument is based on NSE's dominant market presence, scale, profitability, growing investor base and the broader expansion of India's capital markets. Angel One also considers the IPO valuation favourable compared with BSE.
The more cautious view focuses on NSE's valuation and its dependence on trading activity. Nearly 79% of NSE's operating revenue in FY26 came from transaction charges, with options contributing significantly. This makes the company's earnings sensitive to regulatory changes, trading volumes and shifts in investor behaviour.
Religare therefore sees both long-term growth opportunities and near-term regulatory and valuation concerns, resulting in its Neutral rating.
The GMP provides another indicator for investors to consider. At Rs 125, it suggests an estimated listing price of Rs 1,910, or around 7% above the upper issue price. However, the GMP has fallen substantially from Rs 218 on September 11, showing a significant cooling in grey-market expectations before the IPO opened.
The NSE IPO thus presents a combination of strong market dominance and the long-term expansion of India's capital markets, alongside concerns related to valuation, regulation and dependence on derivatives activity.
The IPO opens on September 17 and closes on September 21. Investors will need to assess these factors based on their individual risk tolerance and investment timeframe rather than viewing the current GMP as a guaranteed indication of listing gains.
