Do you wish to gather details on National Stock Exchange of India IPO or NSE IPO? We’ll cover an exclusive NSE IPO Review highlighting the date, price band, size and other relevant data on this Initial Public Offering.
NSE or National Stock Exchange: A Glimpse
National Stock Exchange of India Limited (NSE), one of the most prominent stock exchanges in India, is located in Mumbai, Maharashtra. Established in 1992, National Stock Exchange of India was the pioneer in dematerialized electronic exchange in India.
NSE, one of the first exchanges in India that offered a completely automated screen-based electronic trading system. This primarily helped with easy trading facilities provided to investors spread across the entire length and breadth of Indian subcontinent. Currently, Vikram Limaye is serving as the Managing Director & Chief Executive Officer of NSE.
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NSE IPO: Review
In terms of total market capitalization, National Stock Exchange has companies listed of more than US$2.27 trillion, which makes it the world’s 11th largest stock exchange (as on April 2018). NSE’s global presence is so prominent that its flagship index, the NIFTY 50, a stock index comprised of 50 companies, is often used extensively by investors, both within India and around the globe as a barometer of the Indian capital market.
The index itself was launched in the year 1996 by NSE. V Vaidyanathan, chairman of Board of Directors of Capital First ltd. has put forth an estimate that despite all of that, only about 4% of the Indian economy’s GDP is actually derived from the stock exchanges in India.
In terms of global ranking, NSE was the first among stock exchanges in the world, in terms of volumes traded in stock index option and currency option in 2015, according to WFE. It was ranked second among exchanges globally, in terms of stock future contracts’ trading volume and currency future contracts, trading volume in the year 2015.
As of late September 2016, here were 1,822 companies with a combined market capitalization of INR 108,660,631.3 million listed on its equity cash market. All of this while trading in the cash market was about, respectively, 5.7% and 5.2% of the total trading volume on the exchange in fiscal 2016 and the six months ended 30 September 2016.
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NSE IPO: Price Band and Issue Size
National Stock Exchange of India Limited IPO’s issue size, according to various sources and speculation is said to be about Rs.10,000 crores. However, the actual issue size and the actual price band of the IPO will be known only after the offer price of the IPO issues is known.
National Stock Exchange or NSE IPO: Factors to Consider
The Face Value of each share is said to be Rs. 1, as determined by the company itself. While in consideration of the actual price band, National Stock Exchange of India Limited determines its own offer price.
Here are few factors that you can consider while deciding whether you want to invest in the upcoming IPO of National Stock Exchange, and perhaps how much.
1. Qualitative Factors:
Among whatever argument that can be put forth here, there is no denying that National Stock Exchange of India is one of the largest of its kind and it is one of the biggest market leaders. It was also pioneer of incorporating technology in trading systems, especially in India, which if nothing provides an overview of a forward looking management.
Some scholars go so far to say that it is due to these reasons that trading activity has risen in India in the past couple of decades, boosting the economy as a whole. Along with that, the company obviously has a dependable and strong financial profile, combined with effective and top-notch management.
Also, the establishment of NSE itself consisted of several hurdles, and it was only established by thorough scrutiny, beig established only in 1992 to bring about a transparency in Indian equity markets, and eventually catch up with global trading systems incorporating that level of scrutiny for Indian Companies as well.
NSE was established by the recommendations given out by Pherwani committee, which was done by leading financial institutions including Life Insurance Corporation of India, State Bank of India, Industrial Finance Corporation of India Limited , Industrial Development Finance Company Limited and Stock Holding Corporation of India Limited, which was done on behalf of Government of India by these institutions. It should be noted that while these happen to be some of the finest institutions that time, most of them have managed to retain their throne.
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2. Quantitative Factors:
Here are the company financials for convenience.
NSE Financials to Look at
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |
| Non Current Assets | 59858.8 | 54,674.90 | 39,839.70 | 34,447.30 | 24,177.70 | 24,086.60 |
| Current Assets | 1,35,084.30 | 81,734.70 | 80,692.50 | 98,740.70 | 80,334.50 | 78,317.50 |
| Total Assets | 1,94,943.10 | 1,36,409.60 | 1,20,532.20 | 1,33,188.00 | 1,04,512.20 | 1,02,404.10 |
As you might be aware, Indian markets were largely unaffected by the global financial crisis. In fact Indian markets including NSE even had a little advantage, because investors throughout the world were looking for such safe-havens unaffected by the crisis. As evident from the gradually rising assets, the company as a whole did take advantage of this, and has been on growth higher that the average GDP growth of the same time, which ranges from 4-6%.
In the five years between 2012 and 2017, as evident, the assets have almost doubled, which not only is a signal for growth of trading volume and companies, but also signifies a large growth in the market participants as a whole, which could one of the positive signals of institutionalized trading activity within the country. This should be a positive sign for the investors, because what any market every needs is more participants.
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | |
| Total | 26,808.30 | 20,445.40 | 19,181.2 | 16697.8 | 1,6481.1 | 16481.1 |
| Profit After Tax (PAT) | 12,188.20 | 4393.3 | 7796.8 | 10,192.80 | 8776.1 | 8776.1 |
One look at the profits and it is evident that the profits of the company have been rising steadily in the past decade, except for a rather radical fall in the growth rate in the year 2016. However, despite that, company managed to both revive growth rate and accomplish further growth in the subsequent year, which combined with a steady rise in assets can really be an attribute of effective management.
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NSE IPO: Final Review
That was all about the company, its financials and o other key details. Not a lot of information is available for the IPO right now, which will of course be available in the coming weeks as the date of IPO gets closer. Watch this space for more updates.
Are you thinking of applying to the NSE IPO? What are your reviews on this? Do discuss your feedback in the comments.