BSE, MCX Shares Fall Up To 4% As Jefferies Says IPO-Bound NSE Is Better Diversified

Shares of BSE and Multi Commodity Exchange (MCX) declined up to 4% on Tuesday after global brokerage Jefferies said IPO-bound National Stock Exchange (NSE) is better positioned than its listed peers due to its diversified business model, dominant market share and stronger profitability.

At around 3:10 pm, BSE shares were down 3.18%, while MCX slipped 3%. The two stocks emerged among the biggest losers on the Nifty Capital Markets index, which traded nearly 2% lower. Angel One and Groww also declined around 3% each, reflecting weakness across capital market stocks.

The selling followed Jefferies' note after NSE filed draft papers with SEBI for its proposed ₹30,000-crore initial public offering (IPO). The brokerage said the listing would complete India's listed exchange trio and highlighted NSE's leadership across multiple business segments.

According to Jefferies, NSE commands over 90% market share across most trading categories, except index options and commodity derivatives. Its clearing corporation, NSE Clearing Ltd (NCL), accounts for 88% market share in the cash segment and 91% in futures and options. The brokerage added that NSE has built a technology and data business comparable with global exchanges, with technology-related products contributing around 13% of FY26 revenue.

Jefferies also noted that NSE generated nearly 70% of India's exchange revenues in FY26, making it the country's most diversified exchange with businesses spanning equity cash, equity derivatives, commodity derivatives, currency products, bonds and data services.

Why Jefferies Prefers NSE

The brokerage said NSE enjoys stronger profitability than BSE due to its higher clearing market share and better monetisation of equity options trading.

Jefferies pointed out that derivatives have become the biggest revenue driver for Indian exchanges. Equity options average daily turnover grew at a 56% CAGR between FY20 and FY26, significantly outpacing the 19% growth in cash market turnover. Consequently, derivatives contributed nearly 70% of operating revenues for Indian exchanges during FY26.

The brokerage added that although India trades more options contracts than the US, option premium volumes remain only around one-fifth of US levels, indicating further scope for market expansion.

It also highlighted that NSE's technology platform and expanding commodities business provide additional revenue diversification compared with listed peers.

Regulatory Overhang Easing, IPO In Focus

Jefferies said NSE's reported profitability in recent years was affected by one-off regulatory settlements, including ₹1,390 crore of provisions related to the co-location and dark fibre case in FY26 and a ₹670-crore payment in the TAP matter in FY25.

Excluding these exceptional items, the brokerage estimated NSE's normalised operating EBITDA margin remained stable at around 76-77%, underscoring the strength of its core business.

The brokerage also noted that three public sector general insurers—Oriental Insurance, National Insurance and United India Insurance—are expected to sell a combined 1.1% stake in the IPO through the offer-for-sale route. It said the divestment could help strengthen their solvency position.

With NSE's IPO expected to be one of India's largest public issues, Jefferies believes its market leadership, diversified revenue streams and strong operating profitability differentiate it from listed peers, a view that weighed on shares of BSE and MCX during Tuesday's session