Stock Market

NSE IPO: Is It Better Than BSE?

Created on 20 Oct 2023

Wraps up in 5 Min

Read by 2.7k people

Updated on 11 Dec 2023

NSE IPO: What Entails the Future of India's Largest Stock Exchange

With a market share close to 100% in turnover, NSE has been the gang leader for a while now. Founded in 1875, the Bombay Stock Exchange (BSE) is the oldest and should technically have the upper hand over the NSE, but that’s not the case. NSE’s biggest competitor doesn’t even come close to beating it, and the likelihood of doing so is not certain at this point.

Today, NSE is India's largest stock exchange firm and is headquartered in Mumbai. Taking its supremacy in the stock market to the next level, NSE is planning on bringing an IPO soon. It's funny that the organisation giving the green light to companies for public listing is waiting to do the same. 🤣

Now, this article will overview the upcoming NSE IPO details and the many prospects the firm might utilise the funds for. Along with the IPO details, we will also sprinkle deets on the company’s standing in the industry and its financials (your favourites, I know! 🤓).

While researching for this article, a theory came to my mind. NSE and the tech giant Google have something in common. They both enjoy the huge benefit of being the market leaders in their respective fields. Only NSE is blissfully enjoying being the leading firm without repercussions, whereas Google faces a new lawsuit yearly.

Don’t believe me? Well, scroll ahead and see how NSE has a track record of being the leader ever since its establishment. 👇

Industry Overview

With the Indian economy being the fastest growing in the world and a GDP growth rate of 6.3%, the stock market shows possibilities for significant changes. Every year, more and more people are becoming financially literate, encouraging them to invest with vigour.

As of October 2023, around 128 IPOs were registered on NSE, and many will come in the next three months. These figures showcase how the stock trading sector is booming, taking the overall business and finance sector forward.

Just look at this infographic depicting the difference between BSE and NSE in terms of market capitalisation. ⤵️

Despite having larger number of companies listed, BSE is way behind NSE in terms of market cap. Wondrous, right?

About NSE

After India’s independence from British colonisation in 1947, many fronts and sectors in the nation needed reformation. One such sector was the management and regulation of stock trading. Thus the National Stock Exchange (NSE) was established in 1992 to create an official place for investors and traders to purchase and sell shares.  

Financial experts and institutions from national & international levels came together to create a successful firm that caters to the needs of the stock trading world.
NSE began operations in 1994 after considering all the sensitive and fundamental aspects prescribed by the experts in the field.

Along with being the leading stock exchange in India, NSE is the third-largest in the world by equity trading segment. Its ownership is diversified among various financial institutions, banks, and other entities. Take a look at NSE's financials to see the amazing growth it has been showcasing. ⤵️

NSE's Annual Report

NSE manages the NIFTY 50 Index, a leading benchmark for the Indian capital markets, offering comprehensive coverage across asset classes, including equity, fixed income and derivative securities.
The company offers a comprehensive suite of financial services, including exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions, and financial education offerings.

SGX Nifty is now reformed and established as GIFT Nifty. The headquarters were transferred from Singapore to GIFT City, Gujarat, India. For an in-depth analysis, read the article GIFT Nifty: Is It Better than SGX Nifty?

It also oversees compliance by its trading and clearing members and listed companies with the rules and regulations of the exchange.

Things NSE is Known for

  • With the flagship index, Nifty 50, NSE is well known in the finance world. Many investors, beginners and experienced, religiously follow the index and time the market based on its ups and downs.
  • NSE is known for introducing electronic trading in the Indian stock market, replacing the open outcry system. It operates on a fully automated screen-based trading system, providing transparency and efficiency in the trading process.
  • NSE enjoys a leading market share (by total turnover) of 93% in the Equity Cash market, 100% in Equity Futures, 100% in Equity Options, 70% in Currency Futures and 95% in Currency Options for fiscal 2022, based on premium value. Told you, NSE was the gang leader with the best of all worlds! 😉

Interested to learn about similar IPO options in 2023-24? Then, don’t miss out. Give your investment goals a big push and check out the listicle of the best upcoming IPOs.

IPO Details

NSE officials announced an initial public offering (IPO) by the end of 2023 to raise funds for a variety of objectives. The other details, like listing date, lot and issue size, face value of the shares, etc., are yet to be revealed. NSE still needs to receive approval from SEBI. After which, it takes about 3 to 6 months to reveal information about the IPO.

But, based on the NSE’s standing in the industry, its leading position, and pointers from interviews and announcements, here’s where we believe the firm might use the raised funds.

Gaps for the Utilisation of the Fund Raised by NSE

  • To diversify product and service offerings, develop new products, and maintain innovation.
  • To improve liquidity on the exchange by attracting new issuers, strengthening the domestic investor base, and making the exchange more accessible to foreign investors.
  • To develop and implement initiatives to maintain and improve system infrastructure, technology and front and back-end functions in response to technological developments, customer demand and competitive pressures.
  • To pursue partnerships and collaborations with other leading global stock exchanges, market participants, technology providers, and financial institutions throughout the global exchange ecosystem.
  • To further strengthen the brand and market leadership position by reaching investors in more geographic locations and from different backgrounds across India, conducting investor awareness programs and pursuing tie-ups with state-level education boards and universities to offer post-graduate and certificate programs.

The Bottom Line

NSE IPO is considered one of the most anticipated IPOs of the upcoming fiscal year. This IPO could be one of those options where you know the possibility of things taking a turn for the worse is highly unlikely. In short, the NSE IPO is one such opportunity that even beginner investors with less knowledge about the finance world would find enticing.

So, what do you think? Will you be locking up on this chance? Let us know in the comments!

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Insider by Finology and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.

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Preeti Gupta

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A book-lover who adores everything fictional, Preeti has undertaken the life mission of tasting every flavour available in the pantry. A science student with a Master's in Mass Communication, she now wishes to conquer the Finance world as a writer. With the power invested by the randomly chosen music, she is here to make Finance fun for you.

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