Shares of NCDEX are currently trading around Rs 495-500 apiece according to UnlistedZone and InCred Money. They have risen over 40% in the past month.
While NCDEX received an in-principle Sebi nod via a July 29 letter, it informed about the development in August after ETMarkets first broke the story.
The unlisted shares have received a fresh impetus following investments by a galaxy of marquee investors like Radhakishan Damani, Ramesh Damani, Madhusudhan Kela, Sunil Singhania along with brokers Zerodha and IPO-bound Groww. The investors have pumped-in around Rs 770 crore through the fundraise programme.
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Source: InCred MoneyThe subsequent in-principle approval by Sebi is positioning NCDEX’s move as a major pivot from a niche commodity exchange to a broader financial markets player, said Prashanth Tapse, Senior Vice President & Research Analyst at Mehta Equities, adding that the development has reinforced the likely turnaround narrative.“Investors view this as a structural growth opportunity, given India’s expanding population and rising participation in capital markets and as a result of this, the price per share have rallied to match the peer valuations,” he said.
The sharp rally in NCDEX over the past year has not been purely driven by improvements in its existing business fundamentals but rather by a shift in investor sentiment following its decision to diversify beyond agri-commodity derivatives, Tapse highlighted.
The company’s FY25 topline stood at Rs 46 crore versus Rs 45 crore in FY24, witnessing a 1% jump while the net profit stood at Rs 3.32 crore versus Rs 2.49 crore in the previous financial year, up 33%.
Expert Anuj Gupta, Director at Ya Wealth Global Research also remains unimpressed by the performance of NCDEX’s agri segment, but is hopeful from the equity offerings, once launched. This will be positive for NCDEX and therefore share price is expected to rise, he said.
NCDEX valuation
At current price, the NCDEX’s market capitalisation is estimated around Rs 2,500 crore while its price-to-earnings (P/E) multiple around 11X according to InCred while, UnlistedZone has pegged the Mcap around Rs 2,533.80 crore.
Tapse said that NCDEX’s effective P/E multiple is closer to 30X while its peers BSE, NSE and MCX trade in the range of 30X-60X.
He said that NCDEX appears cheaper at around 11X because of one-off exceptional gains rather than recurring core operations. “Adjusting for these items, it is broadly in line with peers. This suggests limited valuation upside is there at present, and any meaningful re-rating will hinge on the company’s ability to successfully scale its upcoming equity and derivatives business,” the Mehta Equities analyst said.
CEO speak
In chat with ETMarkets Arun Raste said that the opportunities stock markets are giving are immense. Speaking of competition with established players like BSE and NSE, Raste said the market is ‘so big’ that NCDEX doesn’t need to compete directly. Even a 1–2% share would be significant for NCDEX without affecting the other two exchanges. He is of the view that the stock market boom has not reached tier 4-6 cities and the exchange’s connection to that audience is unmatched as it serves over one-and-half million farmers.
“We will bring our own products, form our own niche and make some difference,” he added.
On the agri-products that are currently under suspension (chana, moong, palm oil etc), the NCDEX has been pursuing it with Sebi and the government without any success, so far, the MD said, while highlighting that the withdrawal of these commodities have adversely impacted the markets and the farmers.
Notwithstanding this, the exchange will focus on expanding and strengthening its commoding offerings, he clarified.
NCDEX share price outlook
Gupta sees share price to get a fillip after the launch of equity products and places the targets of Rs 600 to 700 over the next 6 months.
Tapse also sees the launch of an equity product by June 2026 as “transformative” for NCDEX, allowing it to diversify beyond its relatively stagnant core agri-derivatives segment.
“Success in carving out niche areas such as SME equities, specialised derivatives, and innovative trading products could meaningfully expand its revenue streams and profitability,” he added.
However, given NSE’s near-monopoly in equity derivatives and BSE’s growing presence, NCDEX will need to invest heavily in technology, innovation, and market-building to attract traders and investors to its platform, he warned investors, willing to make a move amid the growing buzz around the company.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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