NSE Profits Slide: Is IPO Dream Fading?

The National Stock Exchange (NSE) has reported a 16% year-on-year decrease in net profit for FY26, reaching ₹10,302 crore. Operating margins have also tightened, falling to 67% from 74% in the previous year, signaling a weakening in core operations. This downturn is largely influenced by the Securities and Exchange Board of India's (Sebi) recent measures to curb speculative retail trading in equity derivatives.

Compounding the pressure, NSE incurred substantial settlement charges amounting to ₹1,432 crore, a significant increase from ₹670 crore in FY25. This surge was primarily due to a ₹1,391-crore provision to resolve long-standing co-location and dark fibre cases with Sebi. These cases alleged preferential access to trading infrastructure for certain brokers.

Trading services, NSE's largest revenue source, saw a 4% dip in income as average daily trading volumes moderated across segments following Sebi's curbs. Consequently, overall operating revenue declined by 3%. Rising employee and technology expenses further exacerbated the situation, with employee costs increasing by 20% and technology spending by nearly 30%.

Experts suggest that FY26 might represent a "new normal" for NSE, with margins potentially settling in the mid-70% range rather than returning to previous highs. This perspective implies that the exchange should be valued more as a market-infrastructure platform than solely a futures and options toll, reflecting a fundamental reset in speculative activity.