NSE defends IPO pricing process, says derivatives revenue to remain sustainable

Mumbai: The National Stock Exchange (NSE) said on Friday that its premium valuation was determined by merchant bankers and that the exchange had followed the pricing process recommended by them, while derivatives revenue is expected to remain sustainable as India’s capital markets continue to evolve.

Responding to IANS questions on the sidelines of an IPO conference in Mumbai, NSE officials said the exchange itself had not determined or provided a separate justification for the premium valuation.

“Premium valuation, we don't know. We have not given the justification. Everything has been decided through the merchant bankers and we have priced it accordingly,” the exchange said.

On the sustainability of revenue from derivatives in the coming years, NSE pointed to the evolution of India's capital markets and regulatory framework over the past three decades. The exchange said several measures introduced by the Securities and Exchange Board of India (SEBI), including stringent rules, have strengthened investor protection and encouraged greater participation by retail investors.

“What we have seen over the last 30 to 35 years will continue to be repeated,” the exchange said, indicating that the expansion of India's investor base and the development of the capital market could support its business going forward.

NSE Managing Director and CEO Ashishkumar Chauhan said that the IPO-bound exchange has not applied to SEBI for permission to trade its own shares on its platform.

NSE has fixed a price band of Rs 1,700 to Rs 1,785 per share for its initial public offering. The issue will open for subscription on September 17 and close on September 21, while bidding by anchor investors is scheduled for September 16. The shares are expected to be listed on September 24.

Chauhan said the exchange has played a significant role in channelising domestic savings into the capital markets since its establishment.

“NSE is India’s largest exchange and by many counts, it’s one of the largest in the world. The purpose of NSE was also to channel savings into capital. It’s a testament that NSE has fulfilled the mandate its founders started with,” Chauhan said at a press conference in Mumbai.

He also highlighted NSE’s vertically integrated business model and its presence across multiple asset classes. “We are among the largest vertically integrated exchanges in the sense that we own our technology. Some exchanges focus on commodities or equities. We are across asset classes, commodities, currencies, electricity, even charity,” he said.

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