Mutual Funds Turn to NSE IPO as Exchange Prepares ₹22,569 Crore Public Offer

Indian mutual funds are looking at the National Stock Exchange’s upcoming initial public offering as an opportunity to gain exposure to a business they have largely stayed away from so far. 

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The industry manages roughly ₹60-65 lakh crore, yet mutual funds have had limited ownership in NSE. That could begin to change when the exchange opens its public issue on September 17. 

NSE is offering about 5.1% of its equity through the IPO. The issue is entirely an offer for sale and is expected to raise around ₹22,569 crore at the upper end of the price band, placing the exchange’s valuation at close to ₹4.4 lakh crore. 

NSE already has a broad shareholder base. Nearly 2.28 lakh public shareholders collectively own 67.5% of the exchange. 

NSE enters the market with a large investor base 

The exchange’s scale is one of the central features of the upcoming issue. 

NSE has 13.2 crore unique registered investors spread across 99% of India’s postal codes. It also handles more than half of all equity derivative contracts traded globally and accounts for 11.38% of cash equity trades worldwide. 

Its financial performance has expanded alongside that market presence. NSE reported revenue of nearly ₹16,600 crore in FY26 and profit after tax of about ₹10,300 crore. Margins were in the mid-to-high 70% range. 

The IPO now gives mutual funds a route to participate directly in the exchange through the listed market. 

Retail participation remains an important part of NSE’s growth 

The number of investors participating in India’s capital markets has risen substantially, while average transaction sizes still leave room for further expansion. 

Retail investors currently trade around ₹5,000 on average. As household wealth increases, the figure could move towards ₹6,000-8,000, according to the expectations discussed in the report. 

The number of active investors, currently around 180 million, could also rise towards 300-350 million over time. 

Other areas could add to trading activity as well. These include an increase in listings, greater retail participation and the development of India’s bond and commodity markets, which remain relatively early in their growth. 

NSE’s journey stretches back to India’s shift to electronic trading 

NSE’s public offer also comes after decades of change in the way India’s capital markets operate. 

Before electronic trading became established, a busy session on the Bombay Stock Exchange could involve around ₹400 crore of trading, with settlement stretching over weeks. The same amount of trading can now be handled within a minute. 

NSE has since grown into one of the largest trading platforms globally, with its equity derivatives business accounting for more than half of contracts traded worldwide. 

Its shareholder base has also developed well before the IPO, with individuals already holding shares alongside institutional investors. 

Mutual funds, however, remain one of the large pools of domestic capital with relatively little existing ownership in the exchange. The September 17 IPO provides them with a fresh entry point as NSE moves from a widely held unlisted company into the public market.