BSE shares down 4% in two days as NSE gears up for mega IPO

Shares of BSE extended their losing streak for the second straight session on Wednesday, as investors turned their attention to the much-awaited initial public offering (IPO) of rival National Stock Exchange (NSE).

BSE shares fell as much as 2.2% to ₹3,237.90 on the BSE, taking the company’s market capitalisation to around ₹1.32 lakh crore. The stock had settled 2.19% lower in the previous session. At the day’s low, BSE shares were down more than 4% over the past two sessions.

The weakness comes ahead of the NSE IPO, which opens for subscription on September 17 and closes on September 21. The country’s largest stock exchange is looking to raise ₹22,562 crore through the offer at a price band of ₹1,700–₹1,785 per share, valuing NSE at around ₹4.45 lakh crore at the upper end of the price band.

BSE shares have faced selling pressure since NSE announced its IPO price band and issue schedule last week. The listing of NSE will give investors a direct market-based valuation benchmark for India’s largest stock exchange by trading volumes, providing a fresh reference point for valuations in the exchange sector.

BSE, meanwhile, has undergone a sharp re-rating in recent months, with its shares hitting a 52-week high of ₹4,446.80 on May 27 before correcting. The stock’s 52-week low stands at ₹2,021.50, recorded on September 26, 2025.

The latest decline also comes as investors assess the impact of changes in derivatives trading, market participation and the competitive dynamics between the two exchanges.

NSE IPO in focus

NSE’s IPO is set to be one of the largest public offerings in India. The exchange reduced the size of the offer after fixing a lower price band, with the number of shares in the offer for sale (OFS) cut from 14.89 crore to 12.64 crore.

NSE is expected to make its stock market debut on September 24, bringing India’s two leading stock exchanges into the listed market.

Existing shareholders, including State Bank of India, Bank of Baroda and Canada Pension Plan Investment Board, are among those selling shares in the IPO. As the issue is entirely an OFS, the proceeds will accrue to the selling shareholders and NSE will not receive any funds from the issue.

The ₹6,250 crore anchor book for the NSE IPO is set to open on Wednesday and is expected to attract strong interest from domestic and foreign institutional investors.

NSE Managing Director and CEO Ashishkumar Chauhan said institutional interest in the anchor book had been “unexpectedly large”, with significant participation expected from foreign portfolio investors (FPIs) and domestic mutual funds.

Meanwhile, Religare Broking has assigned a Neutral rating to the IPO, citing a balanced outlook. It noted that NSE’s financial performance in FY26 was impacted by regulatory changes and moderation in trading activity, although operational metrics remained resilient, supported by rising investor participation, fund mobilisation and market presence.

At a P/E of 42.9x, the valuation reflects NSE’s established market position and long-term growth potential, but leaves limited room for earnings disappointments, Religare Broking said. Regulatory changes, including Sebi measures related to options trading, remain a key factor influencing trading volumes and transaction-based income.

The brokerage said NSE’s long-term growth opportunity remains favourable, but the sustainability of earnings growth will depend on trading activity, regulatory stability and continued market participation.

Religare Broking also flagged risks from a decline in transaction volumes and values, given NSE’s significant dependence on transaction-based income, particularly from its options business. Technology infrastructure remains another key risk, with system failures, cybersecurity incidents and challenges in adopting new technologies potentially affecting operations.

The brokerage also highlighted operational and fraud risks arising from NSE’s dependence on third-party service providers and intermediaries. Changes to trading products, market structure or transaction-related regulations could further affect volumes, revenue, financial performance and future growth prospects.

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