NSE investors hold tight as price surges

Experts warn retail investors that private market promise of big post-IPO gains may not always come true

- Abhinaba Saha

Everyone seems to want a piece of the National Stock Exchange (NSE) even before its anticipated public market debut. The bourse's unlisted shares are in short supply in the private market, having surged 40% since last week to shrink its discount to BSE Ltd.

"NSE shares were trading at a 50% discount to BSE's at least five-six months back," Sanat Mondal, head of private markets at Sanctum Wealth told Mint. "In the last few weeks, the discount has narrowed in the range of 10-15%."

NSE's privately held shares are trading between ₹2,375 and ₹2,419 apiece. That's 48 times its FY25 earnings, according to UnlistedZone, a private market broker for retail investors. Rival BSE commands a multiple of 64.2 times its FY25 earnings, according to a Motilal Oswal Financial Services report.

The market has perceived recent reports of NSE exploring a ₹1,000 crore regulatory settlement with the Securities Exchange Board of India (Sebi) as a step closer to its IPO, said Mondal. "(However) NSE is trading at a discount to BSE mainly because there is no clarity on its IPO yet. Technically, there shouldn't be so much of a discount because, fundamentally, those are similar companies. Even (profit) margin-wise, both are comparable."