SharesNservices, in a valuation report on India’s exchange duopoly, said the National Stock Exchange of India (NSE) and BSE Ltd should be assessed across seven globally accepted frameworks — price-to-equity (PE), price/earnings to growth (PEG), discounted cash flow (DCF), EV/ebitda, EV/revenue, sum-of-the-parts and dividend yields. 

The report benchmarked NSE, which is unlisted, and listed BSE against CME (world's larget derivative marketplace), ICE (owner of NYSE), Nasdaq (US Tech benchmark), HKEX (Hong Kong stock exchange), LSEG (London stock exhcnage) and Cboe, while also examining market share and penetration trends to arrive at a triangulated fair value for both.

According to SharesNservices, the key distinction in the two exchanges is growth: BSE has a genuinely higher growth profile than NSE, although that gap is expected to narrow as BSE’s base scales up. The report said it used single-stage growth assumptions over a 10-year period to avoid forecasting policy or product changes that cannot be reliably anticipated.
 

Key findings
SharesNservices said NSE’s profitability metrics are among the best globally, with PAT margin of 62.9 per cent, EBITDA margin of 76.5 per cent and return on equity of about 35 per cent, ahead of CME, ICE, Nasdaq and LSEG on several measures. BSE, it said, also remains top quartile globally, with PAT margin of 52.3 per cent, EBITDA margin of 64 per cent and return on equity of about 31 per cent. Both exchanges are debt-free, with cash positions of Rs 17,323 crore for NSE and about Rs 3,500 crore for BSE.

The report said BSE’s growth premium is driven by gains in derivatives. It said BSE’s F&O premium turnover has risen 1,539 per cent in two years and its notional share has reached 44 per cent, against NSE’s 56 per cent. For FY26, SharesNservices projected BSE PAT growth of 73 per cent year-on-year, while describing NSE’s earnings power as steady.
 

Valuation methods and assumptions
SharesNservices said EV/EBITDA remains the primary industry multiple for exchange stocks globally, while PE is useful for relative comparison and PEG helps adjust valuation for earnings growth. It used DCF over 10 years with terminal value, EV/Revenue as a cross-check, sum-of-the-parts for different business lines, and dividend yield plus payout for mature cash-generating exchanges. The report noted NSE’s dividend yield at 1.84 per cent with a 71 per cent payout, and BSE’s yield at 0.63 per cent with a 24 per cent payout, reflecting a reinvestment phase.

For NSE, SharesNservices used 18 per cent base-case growth for forward valuation, against a historical CAGR of 33 per cent. It put the pessimistic case at 15 per cent and the bull case at 22 per cent. For BSE, it used 26 per cent as the base case, citing its smaller base of Rs 2,288 crore against NSE’s Rs 12,188 crore, gains in F&O share and product expansion. Its pessimistic case was 22 per cent and bull case 30 per cent.

NSE, BSE and global peers
The report said Indian exchanges are growing three to 10 times faster than global peers, with NSE at 17 per cent and BSE at 62 per cent against global growth of 6-7 per cent. It also pointed to India being the world’s largest derivatives market by contracts and having demat penetration of 15 per cent against 44 per cent in the US. SharesNservices said this combination supports premium valuations for Indian exchanges, though it added that absolute valuation premiums still need to be tested through PEG.

On valuation, SharesNservices put NSE’s base-case DCF at Rs 1,908 and blended fair value at about Rs 1,715. Adding a 20 per cent IPO premium, it arrived at around Rs 2,058, against a current market price of Rs 1,900, which it described as essentially fair. For BSE, it put base-case DCF at Rs 3,885 and blended fair value at about Rs 2,971, implying the current market price trades at a 23 per cent premium, which the report said was modest given a 26 per cent growth trajectory.

SharesNservices said NSE offers the stronger risk-reward because of pricing close to fair value, best-in-class margins, zero debt, a large cash balance, a PE of 32.7 times at a PEG of 1.82 times, and a potential IPO listing catalyst in FY27. It said BSE’s earnings momentum and market-share gains support current pricing, while adding that most of the re-rating appears priced in.