NSE shares hit fresh highs, rise over 2%; Nuvama sees 14% upside, calls the stock exchange a ‘compelling buy’

Detailed summary

NSE shares rose more than 2% to a record ₹1,994.50 after Nuvama initiated coverage with a buy rating and a ₹2,220 target. The brokerage cited NSE’s dominant market share, liquidity advantage, technology investments and growth prospects.

Shares of the National Stock Exchange of India (NSE) rose over 2% on Thursday, 12 November, touching a fresh all-time high of ₹1,994.50. The stock had previously recorded a 52-week high of ₹1,965 on 11 November, extending its recent upward momentum.

The rally comes as Nuvama Institutional Equities initiated coverage on NSE with a bullish outlook, describing the exchange as a ‘compelling buy’ and setting a target price of ₹2,220. This implies an upside potential of around 14% from the brokerage's reference price.

In its initiation report, Nuvama said NSE's entrenched liquidity advantage and strong network effects underpin its dominant position in India's capital markets. The brokerage believes the exchange's competitive moat, improving market participation and potential growth from emerging business segments could support its earnings trajectory.

Nuvama said NSE's three-decade-long presence has created a strong liquidity moat that continues to reinforce its market leadership. The exchange commanded around 93% of the cash market, nearly 100% of equity futures and approximately 68% of options premium turnover value (PTV) as of H1 FY27.

According to the brokerage, this market depth makes NSE the preferred trading venue for brokers, foreign portfolio investors (FPIs), market makers and algorithmic traders. Its cash market share has remained around 93% through FY20–FY26, even after the introduction of market interoperability in 2019, while its equity futures market share is close to 100%.

Nuvama noted that NSE's options franchise is also more diversified than that of its rival BSE. The exchange held around 68% of index options premium as of Q2 FY27, while BSE's gains in the segment remain more concentrated around its own expiry day.

The brokerage believes several regulatory challenges facing the derivatives business have already been factored into the market outlook.

Nuvama pointed out that index options account for around 46% of NSE's revenue, compared with approximately 66%…

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