NSE shares in focus as IPO lock-in expiry frees up stake worth Rs 3,247 crore for trade. How the stock performed in a month since listing

ETMarkets.com

However, it is important to note that the lock-in expiry does not imply that all these shares will be offloaded in the market immediately. It simply means that these shares can now be traded by the shareholders. At the previous closing price of Rs 1,709 apiece on BSE, the said number of shares freeing up for trade today is worth nearly Rs 3,247 crore.

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How NSE shares have performed in one month since listing?

NSE shares made their much-awaited market debut on September 24, listing at Rs 1,800 apiece on BSE. This marked a premium of less than 1% over the IPO price of Rs 1,785. Within an hour of the muted debut, the shares jumped over 5% from the IPO price to hit a high of Rs 1,878, pushing the market capitalisation as high as Rs 4.64 lakh crore, before the stock began to decline.

Shares of NSE dropped to Rs 1,709 apiece on Wednesday, their lowest level since listing. The stock is now down nearly 9% from its listing-day peak of Rs 1,878 and 4% below its IPO price of Rs 1,785.

The slide has erased around Rs 41,000 crore from NSE’s peak market value, knocking the exchange out of India’s top 10 most valuable companies. With a market capitalisation of around Rs 4.27 lakh crore, NSE now ranks 13th, behind Reliance Industries, Bharti Airtel, HDFC Bank, ICICI Bank, SBI, TCS, Bajaj Finance, L&T, LIC, Infosys, Kotak Mahindra Bank and HUL, according to BSE data.

Why are analysts bullish on NSE shares?

Macquarie last month initiated coverage on NSE shares with an Outperform rating and a target price of Rs 1,965 apiece. The international brokerage described NSE as “The Dominator,” citing its leading market share and strong market position. It highlighted NSE’s full suite of services, technology and deep liquidity, which make it a key part of India’s financialization, calling it the “lynchpin” of India's financialization. Strong network effects, profitability, and cash generation further support the business.

Emkay Research has a ‘Buy’ call on NSE shares and a target price of Rs 2,050 apiece. The brokerage’s positive view on NSE is underpinned by three factors. Firstly, India’s capital market development and growth story has a long runway as wealth creation and financialization gain momentum in India’s journey. Secondly, NSE has demonstrated its resilient leadership position over decades across the business segments of capital markets, and the business model has enough levers to adjust amid changing regulatory and macroeconomic landscapes and deliver profitable growth.

Finally, the brokerage highlighted that strong profitability and cash generation by MIIs, such as stock exchanges, enable them to globally command higher valuation multiples versus other capital market players that are more fragmented and susceptible to competition.

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PL Capital has an ‘Accumulate’ rating on NSE shares and a target price of Rs 1,950 apiece. The brokerage said the stock exchange dominates the exchange landscape with over 93% share in cash market and 100% in stock and index futures, supported by strong liquidity, robust technology and a comprehensive product suite.