Analysts believe the listing of India’s largest stock exchange could serve as a pivotal re-rating trigger for BSE, setting the stage for a revaluation of relative market positioning, visibility, and investor interest across the two platforms.
SEBI Chairman Tuhin Kanta Pandey, earlier last week, said the regulator is at an “advanced stage” of issuing the NOC for the NSE IPO, possibly within the current month.
“I think we are at a very advanced stage of issuing the NOC for the NSE IPO,” Pandey told news agency ANI, though he refrained from giving a definite timeline.
The NSE has been awaiting regulatory clearance for its IPO for several years, following governance-related lapses and the infamous co-location controversy that had attracted regulatory scrutiny. NSE first filed its draft red herring prospectus in December 2016.
However, the process stalled due to allegations surrounding preferential access to its algorithmic trading systems. In August 2024, NSE reapplied for a fresh NOC and later, in October, settled the Trading Access Point case by paying a penalty of Rs 643 crore.
If the SEBI approval goes through, analysts suggest that the listing of NSE could prompt a reassessment of BSE’s valuation and visibility in the market.Saurabh Jain, Head of Fundamental Research at SMC Global Securities, said BSE could witness a “meaningful re-rating” post the NSE IPO, aided by peer benchmarking and improved sector visibility.
He added that NSE’s public market valuation could help narrow the valuation gap with BSE. As the only listed exchange currently, BSE may also benefit from a scarcity premium and renewed investor interest ahead of the NSE listing.
Jain further pointed out that BSE’s improving fundamentals, including growth in derivatives, mutual fund distribution, and data services, lend additional support to the re-rating narrative.
Sneha Poddar, VP Research, Wealth Management at Motilal Oswal Financial Services, echoed a similar view.
According to her, the approval of the NSE IPO may serve as a meaningful re-rating trigger for BSE. Since NSE cannot list on its own platform, its mandatory listing on BSE is likely to draw substantial attention, including trading volumes and institutional participation.
Poddar noted that this could lead to a reassessment of relative valuations between the two exchanges. While NSE continues to dominate across segments, she believes BSE’s improving traction in derivatives and SME platforms could further enhance its visibility and relevance, laying the groundwork for a potential re-rating.
Both analysts highlighted that BSE’s evolution and the broader impact of NSE’s eventual listing will be closely watched by market participants in the coming weeks.
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(Disclaimer: The recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times.)