Shares of the National Stock Exchange (NSE) saw a significant drop after listing, erasing nearly Rs 41,000 crore from its market capitalization. The NSE debuted at Rs 1,800 on the BSE on September 24, which was a slight premium over its IPO price of Rs 1,785. Initially, the stock rose over 5% to a high of Rs 1,878, bringing its market capitalization to Rs 4.64 lakh crore. However, this gain was short-lived, as the stock fell to Rs 1,712 on Monday, marking a decline of nearly 9% from its peak and 4% below the IPO price.
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The decline in share price has removed the NSE from the list of India's top 10 most valuable companies, with its current market capitalization at approximately Rs 4.27 lakh crore, placing it 12th behind companies such as Reliance Industries and HDFC Bank.
Despite the drop in share price, analysts remain optimistic about NSE's future. Sunny Agrawal, Head of Fundamental Research at SBI Securities, stated that growth in capital markets and overall market sentiment could positively impact NSE shares in the short to medium term. He acknowledged that while NSE's valuation surpasses that of global counterparts like Cboe and Nasdaq, the exchange can maintain its premium due to the robust growth in domestic capital-market volumes.
Agrawal also noted that regulatory considerations are crucial, especially since about 60% of NSE's revenue derives from options trading. He pointed out that any changes in derivatives regulation could affect the market, despite a gradual shift in revenue sources.
Macquarie recently commenced coverage on NSE shares, providing an Outperform rating with a target price of Rs 1,965, suggesting a potential upside of over 14%. The firm described NSE as a dominant player with strong market positioning and technology, vital for India's financial ecosystem.
Emkay Research has given a 'Buy' rating with a target price of Rs 2,050, highlighting three primary factors supporting its positive outlook: the potential for capital market growth, NSE’s long-standing leadership, and its capacity to adapt to regulatory changes.
PL Capital also provided an 'Accumulate' rating with a target price of Rs 1,950, emphasizing NSE’s significant market share and strong liquidity.
Disclaimer: This report was written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or Investment Adviser. The views expressed are based on the respective SEBI-registered Research Analysts or brokerages and should not be construed as recommendations by The Economic Times Digital.