NSE IPO: National Stock Exchange (NSE) filed its preliminary draft red herring prospectus (DRHP) with the capital markets regulator, the Securities and Exchange Board of India (SEBI), on Thursday, June 18, 2026, as the firm aims to raise funds via an initial public offering (IPO).
While investors focus on the complete offer for sale (OFS) public issue and the upsides of a capital market stock due to the rising investor base of the Indian stock market, people should also look out for key risks which can potentially impact NSE’s operations.
If approved by SEBI, the NSE IPO is set to potentially be one of the biggest initial public offerings in the Indian market.
What are the prominent risks of NSE IPO?
1. Volume impact: One of the prominent risks to NSE’s operations is any significant reduction in the volume and value of transactions executed on the stock exchange. This fall in trading volumes can impact the demand for the products and services offered by BSE, growth, and cash flows, in turn, impacting the business operations.
“While supportive government and regulatory action have historically expanded market access and driven trading activity on our platform, policy interventions can also be restrictive,” said NSE in its DRHP filing.
2. Periodical inspections: As NSE operates as a stock exchange services provider, the company is in a highly regulated industry under the supervision of SEBI. Hence, this makes NSE subject to periodic inspections and has also received observations, show cause notices, and administrative warning, deficiency and advisory letters in relation to certain regulatory matters.
Any update of an inspection can potentially impact the stock price due to the investors’ sentiment in the market.
3. Subject of enforcement action: The company can potentially be subject to enforcement actions, penalties, and adjudication proceedings, which can have a material adverse effect on NSE’s business, reputation, financial condition, results of operations, cash flows and prospects.
On May 17, 2023, NSE was subject to a Securities Appellate Tribunal (SAT) order where the company and certain employees received a notice alleging connivance and collusion of OPG Securities Private Limited and its directors with employees or officials of NSE.
The case was disposed off by SEBI later in 2024 due to the absence of sufficient evidence and failure to justify the establishment of any connivance or collusion of the parties. Other proceedings have also resulted in the company paying penalties and charges for several issues.
4. Risk of infrastructure disruption: As NSE is dependent on IT systems and technology infrastructure, any potential disruption, failures, or inadequacies, including those by any third-party company that the firm uses, can adversely affect the business, reputation and results of operations.
5. Reduced income from revenue streams: Failure to maintain or a reduced income from several revenue streams of the company due to trading volumes could result in loss of market share, reduced revenue from operations from our transaction charges, and other adverse effects on NSE’s business.
“Our business significantly depends on revenue from trading activities and, in turn, we earn the majority of our trading revenue from our options and futures businesses,” said NSE in its DRHP filing.
6. Ability to attract new listings: NSE’s ability to attract new listings, issuances, and capital formation activities is critical for the company’s business, and any impact on the volumes of the same can translate to an impact on the revenues of the operations.
7. Cyber security risks: As NSE is heavily technology dependent, the company is subject to any potential cyber security risks and successful cyber attacks, which can disrupt the operations and impact the financial performance of the business.
8. Risk management measures: NSE also disclosed that the investors should be aware that the company’s risk management systems may not always be adequate, which can result in financial losses, further regulatory action and reputation damage to operations.
9. Clearing corporation risks: NSE carries out clearing corporation operations, which opens up the company to several risks related to the services. Any form of failure in the operations can impact the financial condition of the business.
“Our clearing corporation operations expose us to financial, operational, counterparty and systemic risks arising from our relationships with, and dependencies on, clearing members, depositories and other market infrastructure participants,” said NSE in its DRHP filing.
10: Sensitive information risks: Considering NSE is a stock exchange operator, the core business of the company requires the firm to store and transmit sensitive information, which also exposes the firm to risks of internal and external security breaches.
“If market data disseminated by us contains undetected errors, this could also have a material adverse effect on our business, financial condition, or results of operations,” said NSE.
What are NSE’s revenue streams?
NSE earns its income from several business activities; however, the majority of the company’s income comes from the transactional charges, which make up for 78.65% of the total revenue from core operations as of the financial year ended 2025-26.
The data showed that NSE earned ₹13,057.01 crore from transactional charges in the fiscal year ended 2025-26, marginally lower when compared to ₹13,635.76 crore in the previous financial year.
After transactional charges, NSE earns the most from data connectivity charges (6.8% of revenues), followed by data feed and terminal services business (2.83% of revenues), as per the DRHP data.
NSE also carries out other business activities like providing listing services, Data Centre – Rack charges, Licensing services, Cleaning & Settlement services, and other services.
Things to know before you invest in NSE IPO
National Stock Exchange (NSE) is looking to issue up to 14,89,05,525 equity shares with a face value of ₹1 per share as the stock exchange services provider aims to raise funds from the Indian stock market investors via a fully offer for sale (OFS) initial public offering (IPO).
According to several media reports, the NSE IPO is estimated to be valued at around ₹30,000 crore in the unlisted market, potentially set to become one of the biggest-ever public issues after the capital markets regulator gives its approval.
All proceeds raised from the IPO will be used to pay the corporate selling stakeholders, as it is an OFS issue. As there is no fresh issue component in the company’s IPO round, the funds raised will not be used for the company’s capital requirements.
Existing shareholders like State Bank of India, New India Assurance, MS Strategic Mauritius, Canada Pension Plan Investment Board, and General Insurance were among other corporate selling stakeholders offering shares in the NSE IPO round.
NSE is looking to allocate not more than 50% of the IPO shares to the qualified institutional buyers (QIBs), not more than 35% to the retail investors and the remaining 15% to the non-institutional investors (NIIs) via the open market bidding.
The company will release its IPO dates and listing details after the capital markets regulator, SEBI, approves its preliminary prospectus, giving the final approval to go ahead with the public issue round.