Insights into 2024’s Most Valuable Stock Exchanges and NSE’s Upcoming IPO
As the financial landscape continues to evolve, stock exchanges around the globe are constantly vying for the top spot in terms of market capitalization and overall value. In 2024, the National Stock Exchange of India (NSE) has made significant strides, securing its place among the world’s most valuable exchanges. Below, we explore the rankings and key financial metrics of the top exchanges.
The Top 10 Most Valuable Stock Exchanges in the world
Here’s a detailed look at the most valuable stock exchanges globally: (as of May 2024)
| Rank (by MCap) | Stock Exchange | Market Cap ($ bn) | Stock YTD Return (%) | PE (Trailing 12 Months) |
|---|---|---|---|---|
| 1 | Intercontinental Exchange | 76.5 | 3.9 | 30.6 |
| 2 | CME Group | 76.3 | 0.6 | 24.1 |
| 3 | London Stock Exchange | 60.8 | -1.0 | 65.3 |
| 4 | Hong Kong Exchanges | 43.1 | -0.9 | 28.4 |
| 5 | Deutsche Boerse AG | 38.0 | 0.2 | 19.8 |
| 6 | Nasdaq | 34.5 | 3.0 | 31.9 |
| 7 | National Stock Exchange (NSE) | 32.8 | 67.0 | 32.0 |
| 8 | Tradeweb Markets | 23.7 | 22.5 | 59.1 |
| 9 | CBOE Global Markets | 19.5 | 3.9 | 24.8 |
| 10 | B3 SA Brasil Bolsa Balcao | 13.0 | -18.5 | 16.2 |
| 19 | BSE | 4.5 | 26.9 | 49.8 |
| 23 | MCX | 2.4 | 22.0 | 239.5 |
Data Source: The Economic Times– May 11, 2024
Highlighting the National Stock Exchange of India
Based on the data provided in the table, the following conclusions can be drawn:
- The National Stock Exchange (NSE) of India has risen to become the world’s seventh-most-valuable stock exchange, with a market capitalization of $32.8 billion. This remarkable ascent is attributed to its impressive stock YTD return of 67%, showcasing robust growth and investor confidence. Read more about NSE India crossing the $1 billion profit milestone.
- The NSE’s trading at earnings multiple of 30x is on par with the global average P/E ratio of approximately 32x, indicating it is fairly valued relative to its peers.
- In the context of a developing country, the NSE’s P/E ratio of 30 is justified due to its robust growth potential and market dynamics, unlike some global counterparts in developed countries, where P/E ratios might be considered too high.
- Historical data shows global exchanges often experience significant volatility in market valuation. For instance, the London Stock Exchange (LSE) had minimal growth of 0.08% in 2018 but a dramatic increase of 109.47% in 2019.
- In contrast, the NSE has demonstrated stable and predictable growth, averaging 30-35% over the last three years. This consistent growth suggests the NSE is well-positioned to continue performing strongly, potentially outpacing its global peers.
NSE Financial Highlights
₹ in crores
| Particulars | FY 2024 | FY 2023 | Y-o-y growth |
| Total Revenue | 16352 | 12765 | 28% |
| Operating Revenue | 14780 | 11856 | 25% |
| EBITDA | 11611 | 9631 | 21% |
| Profit After Tax | 8306 | 7356 | 13% |
Q4- FY 2024. Read more about NSE India’s 4QFY24 Conference Call
₹ in crore
| Particulars | Q4 FY 24 | Q4 FY23 | Y-o-y growth |
| Total Revenue | 5080 | 3774 | 35% |
| Operating Revenue | 4625 | 3453 | 34% |
| EBITDA | 3610 | 2762 | 31% |
| Profit After Tax | 2488 | 2067 | 20% |
Peer Comparison
₹ in crores
During the year ended March 31, 2024, NSE recognized an expense of Rs. 1,740.97 crores towards the contribution to the Core SGF in the financial statements. Consequently, this expense reduced NSE’s Profit After Tax (PAT) to Rs. 8,305 crores. However, if we add back this contribution:
Revised PAT: Rs. 10,045.97 crores (8,305 + 1,740.97)
Market Cap (as of June 2024): Rs. 301,950 crores
Revised P/E: 30.05 (M cap/ Revised PAT)
Note: Contributions to SGF is under regulatory guideline, this is expected to significantly reduce in coming years. Hence, we are calculating normalised profit by adding back SFG provisioning.
NSE IPO
Indian investors are eagerly anticipating the IPO of the National Stock Exchange (NSE), but several conditions imposed by the SEBI need to be met first. SEBI has stipulated that the NSE must operate glitch-free for a year, upgrade its technology, improve corporate governance, and resolve pending legal issues.
The NSE began discussions with Sebi about its IPO in January 2020, aiming to launch by September, subject to approvals. However, past corporate governance issues and a Sebi investigation into alleged misconduct involving preferential access in the co-location facility have delayed the listing. It was alleged that the exchange misused its co-location facility and gave preferential access to certain trading members. The exchange’s former CEO, Chitra Ramkrishna, was implicated in a 2015 co-location scam. Additionally, the NSE faced scrutiny in 2021 after a significant trading suspension due to technological failures.
Earlier in December 2016, NSE had filed draft papers with Sebi for its much-awaited IPO. The initial share sale was expected to garner Rs 10,000 crore. The existing shareholders were looking to offload 22 per cent shares to the public through the OFS (Offer-for Sale) route.
In 2020, Vikram Limaye, then MD and CEO of NSE, informed PTI, “We have approached Sebi for IPO approval. Once granted, we will proceed with appointing merchant bankers to assist in filing the draft prospectus for the IPO.”
NSE currently boasts 9 crore registered investors, representing over 99% of India’s geographical area, with only 33-35 PINCODES excluded.
The investor base has surged in the past five years, driven by rapid digitisation, increased investor awareness, financial inclusion, and robust market performance. The IPO is expected to launch within 18-24 months. Read more about NSE business model.
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