NSE IPO DRHP: 10 Key Things Investors Must Know Before Applying

The NSE IPO DRHP is here, and India’s financial world has not stopped talking since June 17, 2026, the day the National Stock Exchange of India formally filed its Draft Red Herring Prospectus with SEBI, setting the stage for what could become the largest public offering in the country’s capital market history. The estimated issue size is a staggering ₹30,000 crore, which, if it clears, will comfortably topple Hyundai Motor India’s nearly ₹28,000 crore listing from 2024 as the country’s biggest IPO ever.

For an exchange that first tried to go public back in 2016, only to watch the whole plan unravel thanks to a colocation scandal, this is a very long time coming. Now that the DRHP is officially on the table, let’s cut through the celebratory noise and look at what investors really need to know.

1. It’s All OFS, NSE Won’t See a Single Rupee

Let’s start with the fine print most people breeze past. The public issue is entirely an offer for sale (OFS) of 148,905,525 equity shares, representing nearly 6 per cent of NSE’s paid-up capital, with a face value of ₹1 each. That means NSE itself will not receive any proceeds from this mammoth offering. Every paisa raised goes directly to the selling shareholders. Unlike companies that depend on IPO money to support growth plans, NSE already generates strong cash flows and remains highly profitable. Fair enough, but it also means this is a liquidity event for existing investors, not a growth story fuelled by fresh capital.

2. The Selling Shareholders Include Some Very Recognisable Names

Shareholders participating in the OFS include State Bank of India, MS Strategic (Mauritius), Canada Pension Plan Investment Board, Aranda Investments (Mauritius) Pte Ltd, Bank of Baroda, Stock Holding Corporation of India, General Insurance Corporation of India, The New India Assurance Company, National Insurance Company, and United India Insurance Company. SBI, among the key shareholders selling shares in the OFS, is expected to realise around ₹5,000 crore by offloading 24.75 million shares. Meanwhile, those not in a hurry to exit, LIC, Premji Invest, and investor Radhakishan Damani are not participating in the OFS and are expected to continue holding their stakes. When LIC is happy to stay put, that says something.

3. The Financials Look Strong

Revenue from operations rose at a CAGR of 5.98 per cent from ₹14,780 crore in FY2024 to ₹16,601 crore in FY2026. Profit grew at a CAGR of 11.37 per cent from ₹8,306 crore to ₹10,302 crore over the same period. Operating EBITDA margin stood at 66.78 per cent in FY2024 and 66.85 per cent in FY2026. Those margins are the stuff of boardroom dreams. But zoom in on FY26 specifically, and the picture is less rosy: revenue from operations declined 3.1% year-on-year to ₹16,601 crore from ₹17,141 crore in FY25. Profit for the year fell 15.5% to ₹10,302 crore from ₹12,188 crore in the previous year. A 15.5% profit drop right before an IPO is exactly the kind of thing investors should be asking about at the roadshow.

4. Options Trading Is NSE’s Engine, And That’s a Problem

This is perhaps the most important number in the entire DRHP. Transaction charges accounted for 78.65 per cent of operating revenue in FY26, with options trading alone contributing 60.22 per cent of total revenue from operations. So six out of every ten rupees NSE earns comes from F&O traders, many of whom are retail punters chasing quick money. SEBI has already taken steps to cool this speculation, and NSE’s own DRHP acknowledges that. Regulatory changes, market sentiment and participant behaviour could affect derivatives volumes and revenue. The filing also refers to SEBI measures introduced in 2024 and 2025 to strengthen the derivatives framework, which have affected trading activity. A business built on one product category, especially one regulators are actively trying to tame, is a concentration risk.

5. NSE Is the World’s Largest Derivatives Exchange

Despite the regulatory headwinds, NSE retained its position as the world’s largest equity derivatives exchange, handling 51.18% of global equity derivatives contracts. Its share of global cash equity trades stood at 11.38%. That is an extraordinary moat. Its primary domestic peer is BSE. Globally, its peers include the New York Stock Exchange, Nasdaq, Korea Exchange, and Japan Stock Exchange, among others. And yet, for all that swagger, NSE is proposing to list its own shares on BSE, because regulations do not permit an exchange to list on its own platform. There is a delicious irony in that arrangement.

6. The Colocation Ghost Hasn’t Fully Left the Building

The colocation controversy was the single biggest reason NSE’s 2016 IPO attempt died on the vine. NSE’s journey to the public markets follows a ₹1,300 crore settlement with SEBI in January 2026 over a co-location controversy, which had previously derailed its 2016 listing attempt. However, the NSE has noted that its revised settlement applications in respect of the Colocation and Dark Fibre matters, which were filed with SEBI in March 2026, are pending as at the date of the DRHP. The exchange has made provisions for the same. “Pending” is a word investors should circle in red. The issue is not fully put to bed; it’s just better dressed than before.

7. Tech Risks, Including an AI Angle, Are Explicitly Called Out

NSE’s DRHP is refreshingly candid about its vulnerabilities. The DRHP refers to the February 24, 2021, incident that halted trading for nearly five hours and 24 minutes following issues related to telecom connectivity affecting critical systems. The filing also identifies phishing attacks, ransomware, denial-of-service attacks and data breaches as potential cybersecurity risks. More unusually, AI-powered cyberattacks, deepfake-enabled impersonation, data leakage through third-party AI tools and vulnerabilities introduced by AI-assisted coding could create additional operational and cybersecurity challenges for the exchange. Credit where it’s due, not many Indian IPO filings mention deepfakes as a business risk.

8. Valuation Is Eyebrow-Raising, But Not Entirely Unjustified

NSE could command a valuation of over ₹5 trillion based on prevailing unlisted market prices. Centrum analysts have pegged it at a 15–20% discount to BSE’s current market cap. At the same time, as of March 2026, NSE was holding more than ₹30,146 crore of such funds in the form of broker margins and settlement money, the interest income from which adds another layer to the financials beyond headline trading fees. Dividend per equity share rose from ₹18 to ₹35, reflecting a CAGR of 39.44 per cent. For income-seeking investors, that’s hard to ignore.

9. Revenue Concentration Beyond Derivatives: Top 10 Brokers Do Almost Half the Business

NSE’s top 10 trading members contributed 46.78 per cent of operating revenue in FY26. Any disruption in their operations or decline in trading activity could affect volumes and earnings. This is a peculiar kind of customer concentration for a company that runs an entire national market infrastructure. If one or two large brokers hit trouble, through technology failures, regulatory action, or market exits, NSE feels it immediately.

10. SEBI Has a Deadline, And the Window Is Not Infinite

NSE has received SEBI’s no-objection certificate for listing its shares, subject to completion of the listing process before January 30, 2027. That means the clock is ticking. Half of the net offer will be reserved for qualified institutional buyers (QIBs), 35% for retail investors and 15% for non-institutional investors. Price band details are not yet announced; the price band and the minimum bid lot will be decided in consultation with the book-running lead managers and will be advertised at least two working days before the bid/offer opening date.

Final Words 

The NSE IPO is genuinely historic and, for most retail investors, an opportunity to own a piece of the very infrastructure that powers Dalal Street. But it would be naive to walk in starry-eyed. The derivatives dependence, the still-pending colocation settlement, and the FY26 profit dip are real questions that deserve real answers, ideally before the subscription window opens, not after.

India’s biggest exchange is finally opening its doors to the public. Whether it’s a sound investment depends entirely on how comfortable you are with the skeletons still rattling quietly in the filing.