NSE stock soars 25% in unlisted market post 4:1 bonus issue

Mumbai: Shares of the National Stock Exchange surged by more than 25% in the unlisted market this week following a 4:1 bonus announcement last Friday. According to brokers dealing with the unlisted shares, the stock was trading at around ₹4,300-4,400 last week and is currently trading in the ₹5,400-5,800 range.

At ₹5,500, NSE is valued at ₹2.73 lakh crore or about $33 billion, making it the world's seventh most valuable stock exchange, trailing Nasdaq's market capitalisation by just $1 billion.

Intercontinental Exchange is currently valued at $77 billion while CME Group is valued at $76 billion. London Stock Exchange, Hong Kong Exchanges and Deutsche Boerse AG are valued between $38 billion and $60 billion.

NSE shares have surged 67% so far this year, significantly outpacing the 2.27% gain in the Nifty. The momentum in NSE shares got a boost on Friday when NSE announced a bonus issue, offering four shares for every share held by investors as of the record date.

Such bonus issues are typically implemented by companies to enhance stock liquidity and reduce per-share prices, enhancing accessibility for investors.

NSE on Friday also reported consolidated revenue from operations at ₹4,625 crore for the March 2024 quarter, up by 34% on a year-on-year basis. Net profit rose 20% to ₹2,488 crore. For the fiscal year ended March 2024, NSE reported a net profit of ₹8,306, a jump of 13% year-on-year, and revenues of ₹14,780 crore, up 25%.

"For a smaller lot size, NSE shares are traded at around ₹5,800 while a 5% discount is available for higher lot size," said Sambhav Aggarwal, director of Shri Parasram Holdings. "This upswing in stock price is a result of heightened demand from high net-worth individuals and retail investors amidst a restricted supply of shares following the bonus and dividend announcement."

Sandip Ginodia, managing director of Abhishek Securities, said the NSE share price shot up from around ₹4,400 to ₹5,500 this week after the FY24 results and the bonus announcement.
National Securities Depository (NSDL), India's largest depository, is likely to launch its maiden public issue in the next few months at a valuation of ₹11,000-12,000 crore. NSE, which is currently holding 24% sake, is selling a 9% stake in the initial public offering (IPO).

The other two listed bourses in India, BSE and MCX, rallied 22% and 18% respectively so far this year. These two exchanges are currently trading 80 times and 231 times their trailing 12-month earrings, respectively.

After surging from ₹1,800 in January 2021 to ₹3,500 in December 2021, the stock stabilised around ₹3,000 until December last year, primarily due to the prevailing uncertainty surrounding its impending IPO.
NSE shares can only be bought off the market through brokers who are dealing with the unlisted shares. Buying NSE's unlisted shares is not easy as the bourse has imposed stricter compliance that involves Know Your Customer, funding sources, and background checks of investors. The exchange takes time to extend approval, said brokers.