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NSE gets a rare sell call ahead of India’s biggest IPO

The brokerage forecasts NSE’s options turnover will fall about 4% annually from fiscal 2026 to 2029 as tighter F&O rules weigh on trading activity.

Reported · Written up by our desk · Emerging Markets

Dolat Capital Market initiated coverage of National Stock Exchange of India Ltd. with a sell recommendation as the exchange prepares to launch what it described as India’s biggest initial public offering.

The brokerage said tighter regulations for India’s equity derivatives market would crimp volumes at the world’s largest derivatives exchange by trading volume, potentially leading to a decline in market share, even though it does not dispute NSE’s longer term structural growth story.

Dolat set a target price of ₹1,550, about a 26% discount to ₹2,085 in the private trading market, and argued that lower proprietary trading volumes and weaker index options would limit the exchange’s profit and growth rates.

The note also pointed to sweeping regulatory changes in India’s F&O market over the past two years, including larger contract sizes and limits on weekly options settling to one benchmark index per exchange, and it forecast options trading turnover to decline about 4% per year on an annualized basis between fiscal 2026 and 2029. LiveMint Markets reported the exchange has a market value of about 5.2 trillion rupees.

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