NSE India Unlisted Share

Company Overview:

National Stock Exchange of India Limited (NSE) is the leading stock exchange under the ownership of various group of domestic and global financial institutions, public and privately owned entities and individuals. It is located in Mumbai, Maharashtra. It is the world’s largest derivatives exchange in 2021 by number of contracts traded based on the statistics maintained by Futures Industry Association (FIA), a derivatives trade body. NSE is ranked 4th in the world in cash equities by number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the calendar year 2021. It is under the ownership of some leading financial institutions, banks, and insurance companies. NSE was established in 1992 as the first dematerialized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered easy trading facilities to investors spread across the length and breadth of the country. Ashish Kumar Chauhan is the Managing Director and Chief Executive Officer of NSE. 

NSE was set up by a group of leading Indian financial institutions at the behest of the Government of India to bring transparency to the Indian capital market. Based on the recommendations laid out by the Pherwani committee, NSE was established with a diversified shareholding comprising domestic and global investors. The key domestic investors include Life Insurance Corporation, State Bank Of India, IFCI Limited, IDFC Limited and Stock Holding Corporation of India. Key global investors include Gagil FDI Limited, GS Strategic Investments Limited, SAIF II SE Investments Mauritius Limited, Aranda Investments (Mauritius) Pte Limited, and PI Opportunities Fund.

National Stock Exchange has a total market capitalization of more than US$3.4 trillion, making it the worlds 9th largest stock exchange as of 2022. NSE's flagship index, the Nifty 50, a 50 stock index is used extensively by investors in India and around the world as a barometer of the Indian capital market. The Nifty 50 index was launched in 1996 by NSE.

The corporate sector in India accounts for only 12–14% of the national GDP (as of October 2016). Of these only 7,400 companies are listed of which only 4000 trade on the stock exchanges at BSE and NSE. Hence the stocks trading at the BSE and NSE account for only around 4% of the Indian Economy, which derives most of its income-related activity from the so-called unorganised sector and household spending. 

Mission Statement:

Purpose Committed to improve the financial well-being of people. Vision To continue to be a leader, establish global presence, facilitate the financial well-being of people.

Products Offered:

Equity:

• Equity

• Indices

• Mutual Fund

• Exchange Traded Funds

• Initial Public Offering

• Security Lending and Borrowing

Derivatives:

• Equity Derivatives

• Currency Derivatives

• Commodity Derivatives

• Interest Rate Futures

Debt:

• Corporate Bonds

Equity Derivatives:

The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on 12 June 2000. The futures and options segment of NSE has made a global mark. In the Futures and Options segment, trading in the NIFTY 50 Index, NIFTY IT index, NIFTY Bank Index, NIFTY Next 50 index, and single stock futures are available. Trading in Mini Nifty Futures & Options and Long term Options on NIFTY 50 are also available. The average daily turnover in the F&O Segment of the Exchange during the financial year April 2013 to March 2014 stood at ₹1.52236 trillion (US$19 billion).

On 29 August 2011, National Stock Exchange launched derivative contracts on the world's most-followed equity indices, the S&P 500 and the Dow Jones Industrial Average. NSE is the first Indian exchange to launch global indices. This is also the first time in the world that futures contracts on the S&P 500 index were introduced and listed on an exchange outside of their home country, the USA. The new contracts include futures on both the DJIA and the S&P 500 and options on the S&P 500.

On 3 May 2012, the National Stock exchange launched derivative contracts (futures and options) on FTSE 100, the widely tracked index of the UK equity stock market. This was the first of its kind index of the UK equity stock market launched in India. FTSE 100 includes the 100 of largest UK-listed blue-chip companies and has given returns of 17.8 percent on investment over three years. The index constitutes 85.6 per cent of UK's equity market cap.

On 10 January 2013, the National Stock Exchange signed a letter of intent with the Japan Exchange Group, Inc. (JPX) on preparing for the launch of NIFTY 50 Index futures, a representative stock price index of India, on the Osaka Securities Exchange Co., Ltd. (OSE), a subsidiary of JPX.

Moving forward, both parties will make preparations for the listing of yen-denominated NIFTY 50. Index futures by March 2014, the integration date of the derivatives markets of OSE and Tokyo Stock Exchange, Inc. (TSE), a subsidiary of JPX. This is the first time that retail and institutional investors in Japan will be able to take a view on the Indian markets, in addition to current ETFs, in their own currency and in their own time zone. Investors will therefore not face any currency risk, because they will not have to invest in dollar-denominated or rupee-denominated contracts.

In August 2008, currency derivatives were introduced in India with the launch of Currency Futures in USD–INR by NSE. It also added currency futures in Euros, Pounds, and Yen. The average daily turnover in the F&O Segment of the Exchange on 20 June 2013 stood at ₹419.2616 billion (US$5.3 billion) in futures and ₹273.977 billion (US$3.4 billion) in options, respectively.

Interest Rate Futures:

In December 2013, exchanges in India received approval from market regulator SEBI for launching interest rate futures (IRFs) on a single GOI bond or a basket of bonds that will be cash-settled. Market participants have been in favor of the product being cash-settled and being available on a single bond. NSE will launch the NSE Bond Futures on 21 January on highly liquid 7.16 percent and 8.83 percent 10-year GOI bonds. Interest Rate Futures were introduced in India by NSE on 31 August 2009, exactly one year after the launch of Currency Futures. NSE became the first stock exchange to get approval for interest-rate futures, as recommended by the SEBI-RBI committee.

Debt Market:

On 13 May 2013, NSE launched India's first dedicated debt platform to provide a liquid and transparent trading platform for debt-related products.

The Debt segment provides an opportunity for retail investors to invest in corporate bonds on a liquid and transparent exchange platform. It also helps institutions that are holders of corporate bonds. It is an ideal platform to buy and sell at optimum prices and help Corporates to get adequate demand when they are issuing the bonds.

Competitive Strength:

• NSE is largest exchange of the world’s sixth largest economy 'India'. NSE continued to enjoy a market share of around 94% in the Capital Market segment with a near 100% market share in the Equity Derivatives segment.

• Exchange covers 21% of the global derivatives market on the basis of contracts traded.

• NSE has more than 2799 VSAT terminal which cover more than 1500 cities of India. 

• NSE continued to be the preferred platform for raising capital. With 1,940 companies listed on NSE with a market capitalization of ~INR 203 trillion, NSE continued to be the premier Exchange in the country.

• Free cash flow of the company is significantly increasing with the increase in EPS of the company.

• NSE has introduced several new products such as trading of T-bills and SDLs in Capital Market Segment 

• NSE Clearing Limited (NCL) has been regularly rated AAA by CRISIL for more than a decade now. It is the strongest clearing corporation in the country with sound financial track record. It has a Core Settlement Guarantee Fund (Core SGF) of more than Rs 3,500 crores as on March 2021.

• Company is continuously innovating its products, recently in January 2021 NSE launched derivatives on Nifty Financial Services Index.

Promoters and ShareHolding Pattern:

Peer Comparison:

Financials:

Source: Company Filing Form AOC-4

Source: Company Filing Form AOC-4

Source: Company Filing Form AOC-4

Source: Company Filing Form AOC-4

Valuations:

• Indian capital markets witnessed record high foreign portfolio inflows of ~USD 37 bn (~Rs 2.7 trillion) in FY21, resulting in Indian markets outperforming most major global markets during the year. It will bring many new opportunities for the stock exchange. 

• During the year, direct retail participation strengthened significantly which was reflected in a sharp rise in new investors and an increase in individual investors’ share in the overall market turnover. During fiscal 2021 around 8 million new investors were added, this number is supposed to increase exponentially in coming years.

• Revenue of company grew by 42% in FY22

• Currenct Ratio of company increased from 1.5 to 1.6 in FY22

• RoE showed growth of 24% in FY22

• RoCE showed growth of 17% in FY22.

• Net Income of company increased by almost 50% in FY22.