As the National Stock Exchange (NSE) gears up for its landmark IPO, a crucial re-rating of India’s financial market infrastructure sector is underway. With NSE dominating across almost every operational and financial metric — and yet trading at a lower implied multiple than the already listed Bombay Stock Exchange (BSE) — investors are asking a sharp-edged question:
Is NSE undervalued genuinely, or is BSE riding a valuation bubble?
This article dissects that question through hard data, comparative financials, and valuation analysis. The conclusion: a significant valuation distortion exists — and NSE IPO may be the reset trigger.
📌 Headline Financials – NSE Towers Over BSE
Let’s start NSE valuation comparison with the FY25 numbers, which speak volumes.
📊 NSE vs. BSE: FY25 Financial Comparison
| Metric | NSE | BSE |
|---|---|---|
| Revenue from Operations | 17,141 | 1,287 |
| Total Income | 19,177 | 1,515 |
| EBITDA (Operating) | 12,647 | 579 crore (approx.) |
| PAT | 12,188 | 11,125 |
| EPS (in INR) | 49.24 | 39.39 |
| Return on Equity (RoE) | 45% | 15% |
| Return on Capital Employed (ROCE) | ~43–46% | ~14–16% |
| EBITDA Margin | 74% | ~45% |
| PAT Margin | 58% | ~35% |
Observation: NSE’s top-line and bottom-line numbers exceed BSE’s by a factor of 12–23x, yet NSE is trading at a lower multiple in the unlisted market.
🧠 Operational Dominance — NSE vs. BSE
| Segment | NSE Market Share (FY25) | BSE Market Share (FY25) |
|---|---|---|
| Cash Market | 93.6% | ~6% |
| Equity Futures | 99.9% | Negligible |
| Equity Options | 87.4% (premium turnover) | ~12% |
| Currency Derivatives | 93.6% | ~6.4% |
| IPO Listings (Mainboard & SME) | 242 in FY25 | ~70–80 (SME-focused) |
NSE isn’t just India’s largest exchange — it is a global leader:
- World’s largest derivatives exchange by volume (FIA 2024)
- Second-largest equity exchange globally
- India’s most systemically important financial infrastructure
BSE, while historic and diversified, doesn’t command leadership in any volume-driven segment. Its growth is largely attributed to:
- Mutual fund distribution (StAR MF)
- SME listing platform
- Strategic investments and float-based momentum
Read Also: NSE IPO Coming Soon! How World’s Most Profitable Exchange Makes Money
📈 Valuation Analysis
Despite the financial and operational gap, here’s how both exchanges are currently valued:
| Metric | NSE (Unlisted) | BSE (Listed) |
|---|---|---|
| Market Cap | 5,94,000 | 1,10,885 |
| P/E Ratio | ~53x | ~84.2x |
| EV/EBITDA | ~36.29x (estimated) | ~56.8x (due to lower EBITDA) |
| PEG Ratio | 1.04 | 1.31 |
Takeaway: NSE is significantly cheaper on every valuation metric — despite far superior earnings quality, margin profile, and structural moats.
🔄 The Feedback Loop — A Valuation Mirage?
A peculiar market dynamic is at play:
- Unlisted NSE shares rise, attracting interest.
- Investors unable to access NSE buy BSE as a proxy, creating upward momentum.
- BSE’s stock rallies, increasing its P/E.
- BSE’s rising P/E then justifies a higher implied valuation for NSE.
- Repeat.
This self-reinforcing loop has created distortion, not just differentiation. Once NSE lists, the market will finally have price transparency, potentially correcting inflated multiples and mispricing.
🧪 What ROCE and Capital Efficiency Reveal
ROCE, often overlooked in high-growth tech sectors, is crucial in capital-intensive market infrastructure.
- NSE earns more than INR 0.43 for every INR 1 of capital deployed.
- BSE’s ROCE is less than half — a sign that capital is not being reinvested as profitably.
Despite this, BSE is getting premium valuations, suggesting investors are chasing liquidity and scarcity — not fundamentals.
📊 Growth Trajectory vs Valuation Justification
| Factor | NSE | BSE |
|---|---|---|
| Growth Drivers | Data services, Derivatives, IPOs, Clearing services | StAR MF, SME Listings, Investment income |
| FY25 PAT Growth | +47% YoY | +37% YoY |
| Revenue CAGR (3Y) | ~18–20% | ~14–16% |
| Earnings Visibility | High | Moderate, some reliance on investment gains |
BSE’s growth in non-core segments (like MF distribution) may not sustain same margins. Meanwhile, NSE continues to expand in areas like:
- Data monetization
- Index licensing
- Cloud-based co-location
- Global linkages (IFSC)
These are high-margin, recurring, and scalable — making NSE’s earnings base not just larger, but more durable.
📢 The IPO Catalyst – What Happens Next?
NSE IPO, when priced and launched, will:
- Set a live valuation benchmark for the exchange sector.
- Potentially drive capital rotation out of BSE, once institutional investors can access NSE.
- Lead to a re-rating or de-rating of BSE based on actual fundamentals, not perceived scarcity.
🔍 Final Verdict: NSE Undervalued — Objectively
There is little doubt, based on numbers and market structure:
- ✅ NSE is undervalued by most traditional valuation methods — especially relative to its dominance.
- ⚠️ BSE is overvalued, not because it’s a weak business, but because its current price assumes continued proxy status — a benefit that may vanish post-NSE IPO.
📌 Key Takeaways for Investors
- Don’t judge on price alone — NSE’s higher unlisted share price offers better earnings power.
- Use ROE and ROCE to assess quality, not just EPS.
- Look beyond headline growth — analyze margins, scalability, and sustainability.
📅 What to Watch in H2 2025
- NSE’s final IPO pricing, institutional demand, and retail allocation
- BSE’s Q1 and Q2 FY26 performance — especially from StAR MF and SME segments
- Regulatory changes in market infrastructure and tech compliance
- Evolving ETF, options, and passive index volumes
Disclaimer: This article is for informational purposes only. It does not constitute investment advice. Please consult your financial advisor before making investment decisions.
Very good comparative analysis of both the Exchanges with very much clarity to take decision on investing.
Good article. Any other comparisons pl. Hdb. Hero fin. Nsdl. Etc
Nice comparison. Real comparison may be possible after 6 months of listing of NSE. No doubt NSE is at least 6 times big & king in F & O segment. At the same time BSE is also growing, giving fantastic returns to share holder. I have both. My holding in NSE 25 times greater than BSE. BSE revenue & profits are accelerating.
Nice compilation. Very informative.
BSE shares are quoted only in National Stock Exchange. Similarly NSE shares will be quoted only in Bombay stock exchange platform. So revenue of BSE is likely to grow. NSE shares futures will be transacted in BSE
Excellent article it covers most of the important points .
Few points to add .
The no of share holders in NSE Ltd shares have increased from nearly 30000 to 1,00000 that’ three times in just one month , post issuence of ISIN code for script resulting in transfer of shares within minutes.
The no of shares holders for BSE Ltd is 7,00000 the 7 x of NSE Ltd
The no of shares holders for IEX dominant benergy exchange is 17,00000. which is 17 x from NSE Ltd .
NSE shares are hugely undervalued now and still at highest deep discount as regards future of the co in next 3-5-10-20 years.
The growth of business as shown in 17% however the EPS growth is almost 50 % from EPS ₹33 in 2024 to EPS ₹49.5 in 2025.
Over past 10 years majority of times the EPS growth is in the range of 40-50% ,
This is because of other income which is robust and continue to be so as also reported in the analytical post .
During 2020 ,2021 the growth of basic business of NSE sky rocketed to 50 % and more from regular of 30 % range .
In next 10 years time line NSE Ltd shall have block of two years where the basic business shall grow by 50% or more thus total EPS by 60 -70 % . This will be time to take the stock to a big upside in those two years .
BSE ltd has given 20 x up side in stock price from @₹400 to@₹8000 in just 1& 1/2 years time immediately past . BSE ltd has given overall more than 40 x returns in 11 years of listing.
NSE Ltd can verywell match the same in next 10-12 years.
NSE Ltd is pure Karnot Cycle stock analogy of thermodynamics .
The input is zero output 100 % as perpetual engine for next 100 years.
US based investment fund has launched an India specific investment fund to buy only NSE Ltd stock , as the only one qualifying bas 100 % of investment criteria of Warren Buffett .
Excellent article it covers most of the important points .
Few points to add .
The no of share holders in NSE Ltd shares have increased from nearly 30000 to 1,00000 that’ three times in just one month , post issuence of ISIN code for script resulting in transfer of shares within minutes.
The no of shares holders for BSE Ltd is 7,00000 the 7 x of NSE Ltd
The no of shares holders for IEX dominant benergy exchange is 17,00000. which is 17 x from NSE Ltd .
NSE shares are hugely undervalued now and still at highest deep discount as regards future of the co in next 3-5-10-20 years.
The growth of business as shown in 17% however the EPS growth is almost 50 % from EPS ₹33 in 2024 to EPS ₹49.5 in 2025.
Over past 10 years majority of times the EPS growth is in the range of 40-50% ,
This is because of other income which is robust and continue to be so as also reported in the analytical post .
During 2020 ,2021 the growth of basic business of NSE sky rocketed to 50 % and more from regular of 30 % range .
In next 10 years time line NSE Ltd shall have block of two years where the basic business shall grow by 50% or more thus total EPS by 60 -70 % . This will be time to take the stock to a big upside in those two years .
BSE ltd has given 20 x up side in stock price from @₹400 to@₹8000 in just 1& 1/2 years time immediately past . BSE ltd has given overall more than 40 x returns in 11 years of listing.
NSE Ltd can verywell match the same in next 10-12 years.
NSE Ltd is pure Karnot Cycle stock analogy of thermodynamics .
The input is zero output 100 % as perpetual engine for next 100 years.
US based investment fund has launched an India specific investment fund to buy only NSE Ltd stock , as the only one qualifying bas 100 % of investment criteria of Warren Buffett .
Excellent article it covers most of the important points .
Few points to add .
The no of share holders in NSE Ltd shares have increased from nearly 30000 to 1,00000 that’ three times in just one month , post issuence of ISIN code for script resulting in transfer of shares within minutes.
The no of shares holders for BSE Ltd is 7,00000 the 7 x of NSE Ltd
The no of shares holders for IEX dominant benergy exchange is 17,00000. which is 17 x from NSE Ltd .
NSE shares are hugely undervalued now and still at highest deep discount as regards future of the co in next 3-5-10-20 years.
The growth of business as shown in 17% however the EPS growth is almost 50 % from EPS ₹33 in 2024 to EPS ₹49.5 in 2025.
Over past 10 years majority of times the EPS growth is in the range of 40-50% ,
This is because of other income which is robust and continue to be so as also reported in the analytical post .
During 2020 ,2021 the growth of basic business of NSE sky rocketed to 50 % and more from regular of 30 % range .
In next 10 years time line NSE Ltd shall have block of two years where the basic business shall grow by 50% or more thus total EPS by 60 -70 % . This will be time to take the stock to a big upside in those two years .
BSE ltd has given 20 x up side in stock price from @₹400 to@₹8000 in just 1& 1/2 years time immediately past . BSE ltd has given overall more than 40 x returns in 11 years of listing.
NSE Ltd can verywell match the same in next 10-12 years.
NSE Ltd is pure Karnot Cycle stock analogy of thermodynamics .
The input is zero output 100 % as perpetual engine for next 100 years.
US based investment fund has launched an India specific investment fund to buy only NSE Ltd stock , as the only one qualifying bas 100 % of investment criteria of Warren Buffett .
A.K.Mishra
Delhi NCR
Excellent article it covers most of the important points .
Few points to add .
The no of share holders in NSE Ltd shares have increased from nearly 30000 to 1,00000 that’ three times in just one month , post issuence of ISIN code for script resulting in transfer of shares within minutes.
The no of shares holders for BSE Ltd is 7,00000 the 7 x of NSE Ltd
The no of shares holders for IEX dominant benergy exchange is 17,00000. which is 17 x from NSE Ltd .
NSE shares are hugely undervalued now and still at highest deep discount as regards future of the co in next 3-5-10-20 years.
The growth of business as shown in 17% however the EPS growth is almost 50 % from EPS ₹33 in 2024 to EPS ₹49.5 in 2025.
Over past 10 years majority of times the EPS growth is in the range of 40-50% ,
This is because of other income which is robust and continue to be so as also reported in the analytical post .
During 2020 ,2021 the growth of basic business of NSE sky rocketed to 50 % and more from regular of 30 % range .
In next 10 years time line NSE Ltd shall have block of two years where the basic business shall grow by 50% or more thus total EPS by 60 -70 % . This will be time to take the stock to a big upside in those two years .
BSE ltd has given 20 x up side in stock price from @₹400 to@₹8000 in just 1& 1/2 years time immediately past . BSE ltd has given overall more than 40 x returns in 11 years of listing.
NSE Ltd can verywell match the same in next 10-12 years.
NSE Ltd is pure Karnot Cycle stock analogy of thermodynamics .
The input is zero output 100 % as perpetual engine for next 100 years.
US based investment fund has launched an India specific investment fund to buy only NSE Ltd stock , as the only one qualifying bas 100 % of investment criteria of Warren Buffett .
Excellent article it covers most of the important points .
Few points to add .
The no of share holders in NSE Ltd shares have increased from nearly 30000 to 1,00000 that’ three times in just one month , post issuence of ISIN code for script resulting in transfer of shares within minutes.
The no of shares holders for BSE Ltd is 7,00000 the 7 x of NSE Ltd
The no of shares holders for IEX dominant benergy exchange is 17,00000. which is 17 x from NSE Ltd .
NSE shares are hugely undervalued now and still at highest deep discount as regards future of the co in next 3-5-10-20 years.
The growth of business as shown in 17% however the EPS growth is almost 50 % from EPS ₹33 in 2024 to EPS ₹49.5 in 2025.
Over past 10 years majority of times the EPS growth is in the range of 40-50% ,
This is because of other income which is robust and continue to be so as also reported in the analytical post .
During 2020 ,2021 the growth of basic business of NSE sky rocketed to 50 % and more from regular of 30 % range .
In next 10 years time line NSE Ltd shall have block of two years where the basic business shall grow by 50% or more thus total EPS by 60 -70 % . This will be time to take the stock to a big upside in those two years .
BSE ltd has given 20 x up side in stock price from @₹400 to@₹8000 in just 1& 1/2 years time immediately past . BSE ltd has given overall more than 40 x returns in 11 years of listing.
NSE Ltd can verywell match the same in next 10-12 years.
NSE Ltd is pure Karnot Cycle stock analogy of thermodynamics .
The input is zero output 100 % as perpetual engine for next 100 years.
US based investment fund has launched an India specific investment fund to buy only NSE Ltd stock , as the only one qualifying bas 100 % of investment criteria of Warren Buffett .
Excellent article it covers most of the important points .
Few points to add .
The no of share holders in NSE Ltd shares have increased from nearly 30000 to 1,00000 that’ three times in just one month , post issuence of ISIN code for script resulting in transfer of shares within minutes.
The no of shares holders for BSE Ltd is 7,00000 the 7 x of NSE Ltd
The no of shares holders for IEX dominant benergy exchange is 17,00000. which is 17 x from NSE Ltd .
NSE shares are hugely undervalued now and still at highest deep discount as regards future of the co in next 3-5-10-20 years.
The growth of business as shown in 17% however the EPS growth is almost 50 % from EPS ₹33 in 2024 to EPS ₹49.5 in 2025.
Over past 10 years majority of times the EPS growth is in the range of 40-50% ,
This is because of other income which is robust and continue to be so as also reported in the analytical post .
During 2020 ,2021 the growth of basic business of NSE sky rocketed to 50 % and more from regular of 30 % range .
In next 10 years time line NSE Ltd shall have block of two years where the basic business shall grow by 50% or more thus total EPS by 60 -70 % . This will be time to take the stock to a big upside in those two years .
BSE ltd has given 20 x up side in stock price from @₹400 to@₹8000 in just 1& 1/2 years time immediately past . BSE ltd has given overall more than 40 x returns in 11 years of listing.
NSE Ltd can verywell match the same in next 10-12 years.
NSE Ltd is pure Karnot Cycle stock analogy of thermodynamics .
The input is zero output 100 % as perpetual engine for next 100 years.
US based investment fund has launched an India specific investment fund to buy only NSE Ltd stock , as the only one qualifying bas 100 % of investment criteria of Warren Buffett .
Very good comparison can I buy unlisted NSE shares
Now I already have 100
Very good comparison can I buy unlisted NSE shares Now
Good analysis 👍. I have one doubt whatever price increasing in unlisted NSE share, truly it will not price fixing at the listing time ???
You have not taken the latest financial results
BSE derivatives has risen fantastically from 12 % to 18% in six months, fantastic achievement! besides it has many FII’s as shareholders , they will continue supporting BSE.
While NSE in recent times has only taken steps how to obstruct BSE market share, BSE has taken constructive steps to widen the reach so the market is accessible to many more.
Can someone share the face value if NSE shares ? Is it 2 rupees or some other value ?
Very good article. Nice comparison.Any other comparisons please.
Given the valuations.. NSE will dominate. Hope it’s IPO and Listing soon…
Excellent comparative analysis in the article it covers very most of the important points. Thank you 😊
V good, analysis each factor discrib
With the kind of valuation NSE commands its IPO size ( for 10% dilution ) will be in excess of 60,000 crores. Or the IPO will have to be at a discount to current prevailing price. BSE will have to improve its earning to maintain its price else it is surely due for correction.
Good article
Amazing presentation in minute details.New way to think and realign our investment 👍