NSE Q4 FY26 Results:
What Really Happened & What Lies Ahead
By Kanishk Devbangia, NISM Series XV Certified Research Analyst (NISM-202300182946)
1 — What Is NSE, and How Does It Make Money?
NSE
The National Stock Exchange of India was founded in 1992 and has grown to become the world's largest derivatives exchange by the number of contracts traded. Every time someone in India buys or sells a share, an options contract, a futures contract, or a currency derivative, the transaction almost certainly passes through NSE's infrastructure.
NSE is still an unlisted company — meaning its own shares do not trade on any public exchange. However, they are actively traded in what is called the unlisted or pre-IPO market, and NSE has been moving steadily toward a public listing (more on that later).
How Does NSE Earn Revenue?
NSE earns money primarily through transaction charges — a small fee it collects on every trade. Think of it like a toll booth: the more vehicles (trades) that pass through, the more tolls (fees) it collects. Other revenue streams include data feed services, listing fees from companies that list on NSE, and connectivity charges from brokers who plug into NSE's systems.
This is why trading volumes matter enormously to NSE. When markets are active and volumes are high, revenues naturally rise. When markets are quiet or regulatory changes reduce certain types of trading, revenues take a hit.
2 — Reading the Numbers
(Q4 FY26)
Let us start with the quarter that just ended — January to March 2026. This is called Q4 FY26 (the fourth quarter of Financial Year 2026). Here are the key numbers:
3 — The Full-Year Picture (FY26): Why Did Profits Fall?
The Headline That Looked Scary
Zoom out from Q4 and look at the full financial year, and the picture looks different. For all of FY26 (April 2025 to March 2026), NSE's profit after tax came in at ₹10,302 crore — a 15% decline from ₹12,188 crore in FY25. Revenue from operations also fell about 3% to ₹16,601 crore. Earnings per share dropped from ₹49 to ₹41.62.
Headlines will call this a bad year. But stripping out the noise reveals a far more nuanced story.
Three Reasons the Annual Profit Dropped
Reason 1 — SEBI's F&O Rule Changes
The Securities and Exchange Board of India (SEBI), India's market regulator, introduced new rules for the Futures and Options (F&O) segment in FY26. These rules — which included reducing the number of weekly expiry contracts and tightening position limits — significantly reduced trading volumes in equity derivatives. Since F&O transaction charges are NSE's single largest revenue source, this had an immediate and direct impact on revenue.
Reason 2 — SEBI Settlement Fees (One-Time, Non-Recurring)
NSE paid ₹1,432 crore in settlement fees to SEBI during FY26 related to old regulatory cases involving colocation infrastructure and dark fibre connectivity. These were legacy issues that NSE has been resolving. Crucially, these are one-time charges — they do not recur every year. Strip them out and the underlying business looks considerably healthier.
Reason 3 — Higher Costs from New Labour Codes
India's new Labour Code regulations changed how companies account for employee costs, adding to NSE's expense base in FY26. Again, this was a transitional, one-time adjustment rather than a structural increase in costs.
4 — The Q4 Recovery: Why the Last Quarter Matters
The most important signal in NSE's FY26 results was not the annual number — it was Q4. Here is why: Q4 FY26 showed a powerful sequential recovery. Total income grew 22% over Q3. Profit grew 19%. Transaction charges surged 34% quarter-on-quarter. Equity options premium daily volumes jumped 43% QoQ.
What drove this recovery? Trading activity picked up meaningfully as markets stabilised after the volatility of the previous quarters. NSE's market share in index options premium remained robust at 62.9%, and its overall F&O premium market share stood at 86.8%.
Additionally, NSE's primary market activity was exceptional in FY26. The exchange facilitated a record ₹1.8 lakh crore in IPO fund mobilisation, ranked second globally by number of IPO listings, and helped 219 new companies list on Indian markets.
5 — The ₹35 Dividend: What It Means
NSE's board recommended a final dividend of ₹35 per equity share for FY26. On a face value of Re 1 per share, this translates to a 3,500% dividend payout — a number that sounds astronomical but simply reflects the low face value denomination.
The ₹35 payout includes a special one-time dividend of ₹10 per share. This signals that even in a year of regulatory headwinds and settlement costs, NSE's cash generation remained strong enough to reward its shareholders generously. The dividend is subject to shareholder approval at the Annual General Meeting.
What Is a Dividend?
For complete beginners: a dividend is a share of a company's profits distributed to its shareholders. When NSE declares ₹35 per share, every person who holds one NSE share receives ₹35 in cash. It is a way of returning value to the people who own a piece of the company.
6 — The Long-Awaited IPO: India's Biggest Listing Story
What Is an IPO?
An Initial Public Offering (IPO) is when a private company lists its shares on a public stock exchange for the first time, allowing ordinary investors to buy a stake. It is the moment a company goes from being privately held to publicly traded.
Here is the great irony of Indian markets: the country's largest and most influential exchange — the very platform on which thousands of IPOs are listed every year — has never itself been listed publicly. NSE has been navigating its own IPO journey for years, with repeated delays due to regulatory matters.
Where Does the IPO Stand Now?
The process has accelerated significantly. NSE's board approved plans to pursue a public listing through an Offer for Sale (OFS) in February 2026, allowing existing shareholders to sell part of their holdings. Around 20 existing investors are reportedly preparing to sell approximately 5% stake.
NSE has reportedly set a deadline of June 15, 2026 to file its Draft Red Herring Prospectus (DRHP) — the formal document submitted to SEBI before any IPO. Market watchers and analysts anticipate NSE could potentially list by December 2026 or early 2027, if market conditions remain supportive.
Who Are the Major Shareholders?
Among the institutional investors expected to participate in the OFS are Singapore's Temasek Holdings, Canada Pension Plan Investment Board, Life Insurance Corporation of India (LIC), State Bank of India (SBI), and private equity firm ChrysCapital.
7 — NSE's Unlisted Shares and Valuation
Since NSE is not yet publicly listed, its shares trade in what is called the unlisted or grey market — an informal marketplace where investors can buy and sell shares of pre-IPO companies. Following the Q4 FY26 results announcement, NSE's unlisted shares rose approximately 10% and were trading at around ₹2,000–₹2,050 per share, compared to ₹1,825–₹1,850 in March 2026.
How Is NSE Valued?
At a price of around ₹1,900 per unlisted share, NSE trades at approximately 45 times its FY26 earnings per share of ₹41.62. Its book value per share is ₹129.75, implying a price-to-book ratio of around 15 times. These multiples sound high in isolation but are common for exchange businesses, which are capital-light near-monopolies.
For comparison: BSE (Bombay Stock Exchange), which is already listed, trades at roughly 70 times earnings. MCX (a commodity exchange) is valued at about 80 times. Singapore Exchange sits at around 35 times. NASDAQ at roughly 30 times. NSE, at 45 times, sits comfortably in the middle of this range.
What Happens After the IPO?
Once NSE lists, it is widely expected to be included in major stock market indices. When a company enters an index, all Exchange-Traded Funds (ETFs) that track that index automatically have to buy its shares — creating a surge in institutional demand. This index inclusion effect could be a significant development for NSE's visibility and trading liquidity post-listing.
8 — What Lies Ahead for NSE in FY27?
Looking into FY27 (April 2026 onwards), three major themes will define NSE's trajectory.
Theme 1 — The Regulatory Pendulum on F&O
The key question is whether SEBI will maintain, tighten, or relax its F&O rules. The current restrictions on weekly expiries reduced NSE's volumes materially. Any relaxation — such as allowing more weekly expiry dates — would be a significant tailwind. Conversely, any further tightening would add pressure. NSE's April 2026 market share showed a slight dip in index options due to market holidays falling on expiry days, underlining how sensitive revenue is to trading calendar effects.
Theme 2 — The IPO
The upcoming public listing of NSE is perhaps the single most anticipated event in Indian capital markets. A successful DRHP filing followed by regulatory approval and eventual listing would bring with it index inclusion, institutional buying, and a meaningful re-rating of NSE's market valuation. The management's June 15 deadline for the DRHP signals intent and urgency.
Theme 3 — Commodities and Energy Derivatives
NSE has been expanding aggressively into Commodity derivatives and Electricity derivatives. These segments are still nascent but could become meaningful revenue contributors in FY27 and beyond, potentially offsetting any structural market share loss in equity options to BSE, which has been gaining ground in that space.
Disclaimer :
This is written for educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell securities. All data is sourced from publicly available information. Investments in securities markets are subject to market risks — please read all offer documents carefully before investing.
