The National Stock Exchange is approaching a significant milestone in its public listing journey, with the exchange confirming it expects to file its draft red herring prospectus (DRHP) by the second week of June. According to reports from The Economic Times, this development has reignited interest in NSE's unlisted shares, which continue to trade actively in the private market. The exchange currently trades at approximately ₹1,950-2,050 per share, implying a valuation of roughly ₹5 lakh crore. However, analysts are cautioning investors against treating the approaching IPO as an automatic opportunity for quick gains, with experts noting that the pre-IPO window should not be seen as a guaranteed arbitrage opportunity.
Market experts are highlighting significant valuation risks for potential investors. As reported by The Economic Times, Paresh Bhagat, CIO of Veer Growth Fund and chairman of Mangal Keshav, noted that based on FY26 profit after tax of around ₹10,300 crore, the exchange is already valued at nearly 48-50 times earnings. Arpit Jain, Joint Managing Director at Arihant Capital Markets, emphasized that "a significant portion of the optimism around the listing is already reflected in the current unlisted market price." The exchange reported total income of ₹18,713 crore and consolidated net profit of ₹10,302 crore in FY26, demonstrating its strong financial performance despite current valuation concerns. Nitant Darekar, Research Analyst at Bonanza, noted that NSE currently trades at around 45 times FY26 earnings, which while rich, remains below some listed peers such as BSE at around 70x and MCX at around 80x.
Financial analysts are recommending a cautious approach to current unlisted share purchases, with experts emphasizing that investors should focus on valuation rather than timing. According to The Economic Times, Ishan Tanna, Senior Associate at Ashika Capital, warned that "historically, buying unlisted shares very close to the IPO stage has not always offered the best risk-reward for investors." He noted that "in many cases, the biggest gains are made when IPO visibility is low and uncertainty is high. Once the DRHP gets filed and listing draws closer, valuations often become expensive as the IPO excitement premium starts getting priced in." The consensus among experts suggests that while NSE remains one of India's highest-quality businesses, investors should focus on whether current prices adequately compensate for the risks ahead rather than timing the IPO window.
Despite valuation concerns, NSE maintains its position as India's largest stock exchange and dominates equity derivatives trading. As reported by The Economic Times, the exchange's capital-light business model, strong cash flows and dominant market position have made it one of the most sought-after names in the unlisted market. NSE remains a capital-light near-monopoly with significant competitive advantages in Indian capital markets. However, analysts note that the exchange's earnings remain linked to derivatives trading activity, which can be volatile, especially after regulatory changes in the futures and options segment. The recent settlement of the long-running co-location case has removed a major overhang on the IPO process, but the eventual IPO pricing remains unknown and could be priced below current unlisted market valuations.
Investors should be aware of important regulatory implications when considering unlisted purchases. According to The Economic Times, post-DRHP, fresh unlisted purchases face a one-year lock-in period, which adds practical considerations to investment timing. The urgency is particularly important because many retail investors view the narrowing pre-IPO window as a reason to buy immediately. However, analysts caution that valuation, not the calendar, should drive investment decisions. Paresh Bhagat emphasized that "the key risk is valuation and entry price," noting that "if the IPO is priced more reasonably for public-market investors, the gap versus current unlisted prices could be meaningful." This uncertainty, combined with the approaching IPO timeline, suggests that valuation considerations should take precedence over timing for potential investors in the NSE story.
