The National Stock Exchange of India (NSE) continues to tower over the country’s capital markets, commanding monopoly status across key trading segments, a report by PL Capital highlighted.

NSE has the highest market share in domestic market, with a robust 94 per cent share in cash equities and near-total dominance (99.9 per cent) in equity options.

In terms of overall market capitalisation, NSE is ranked as the seventh largest stock exchange globally in December 2024 with its market cap crossing ₹439 lakh crore.

In FY25, NSE posted a net profit of ₹12,188 crore—almost 10 times BSE’s ₹1,322 crore—with an industry-leading EBITDA margin of 74 per cent and ROE of 45 per cent.

Its derivatives revenue—primarily equity options—forms 67 per cent of its total income, supplemented by data services, index licensing, and co-location facilities.

NSE has attracted 10x higher equity funding than BSE, reflecting a significantly greater institutional confidence and growth potential. This strong capital backing positions NSE to scale faster, innovate aggressively, and consolidate its market leadership in India’s evolving financial ecosystem, the report added.

Investor base

NSE’s reach spans over 11.3 crore unique investors, covering 99.9 per cent of India’s PIN codes, mirroring retail penetration and structural growth in financialisation trend, the report read.

“As India’s GDP and household savings rise, NSE stands to benefit directly from increased market participation.”

The exchange also leads in innovation—its GIFT Nifty platform, enhancing global connectivity. NSE has highest IPO listings in Asia in FY24 with deepened retail participation and global inflows via GIFT Nifty, it added.

Global competitiveness

Among its global peers, NSE boasts the highest return on equity and some of the lowest operational costs per trade. Compared to exchanges like Nasdaq, SGX, and HKEX, it delivers significant margin performance.

Despite being unlisted, NSE has drawn heavy institutional backing from names like LIC, SBI, Temasek and Premji Invest, signalling long-term investor confidence.

Key risks

PL Capital report flagged certain risks including co-location scam, delayed IPO, rising competition from BSE and regulatory risks on options trading.

Meanwhile, the BSE has captured 20-25 per cent market share in weekly index options by shifting expiries and slashing fees.

A potential clampdown by SEBI could dent NSE’s primary revenue stream.

The co-location controversy continues to haunt the exchange’s governance image. The long-awaited IPO stalls capital-raising, limits investor participation, and puts it at a disadvantage compared to listed rivals like BSE.

Published on June 30, 2025