On December 28, 2016, one of India’s most important financial institutions filed draft documents to float an initial public offering. This week, that institution finally went public.
If you haven’t guessed already, we are talking about the National Stock Exchange of India.
For nearly a decade, public market investors couldn’t buy shares of the NSE. On Thursday, NSE shares began trading on the BSE—its smaller rival—as per regulations that don’t allow a stock exchange to list its shares on its own platform.
NSE’s Rs 22,569-crore IPO was India’s second-largest, after Hyundai Motor India’s Rs 27,870-crore offering in 2024. The IPO was subscribed only 5.7 times, and the listing wasn’t anything spectacular either. NSE’s shares closed at Rs 1,818, up 1.85% from the Rs 1,785 issue price, valuing the exchange at about Rs 4.5 trillion, or about $46.9 billion.
The IPO itself did not bring fresh capital into NSE. It was entirely an offer for sale by existing shareholders. But then, NSE doesn’t really need fresh capital as it remains highly profitable. In fact, it has grown substantially over the past decade thanks to the equities boom that has captured Indian investors’ attention.
A case in point is its financial performance. The NSE’s revenue from operations for the year ended March 2026 was Rs 16,601 crore and net profit was Rs 10,302 crore. That’s a jump of almost nine times from revenue of Rs 1,863 crore in 2015-16 and an increase of 10.5 times in profit from Rs 975 crore that year.
Moreover, NSE enters the public market with a dominant position in Indian equities. It accounts for about 93% of cash-equity trading and nearly 75% of options trading.
Derivatives transaction charges accounted for about 68% of NSE’s operating revenue in the June quarter. But derivatives activity has moderated since 2024, amid tighter regulation, higher taxes and concerns around the closing auction.
The numbers put two parts of the business side by side: NSE has an unusually strong position in India’s markets, while a large share of its revenue comes from a segment whose activity has slowed.
At the IPO price, NSE was valued at about 43 times its 2025-26 earnings. BSE, which listed in 2017, was trading at about 47 times trailing earnings, according to LSEG data cited by Reuters. BSE had a market value of about Rs 1.3 trillion.
To be sure, NSE has businesses beyond derivatives, including market data, listing and other services. But the scale of the derivatives business means its trading volumes will remain closely watched as a listed company.
After years of regulatory and legal hurdles, NSE is finally public. Its results will now give investors a regular view of how trading activity translates into revenue and earnings.
The Cost of Selling
Staying with the financial services sector, insurance-related stocks such as Policybazaar and the recently listed Turtlemint were hammered this week after the industry regulator announced certain proposals that could hurt their business.
Policybazaar helped bring insurance buying into India’s digital financial-services story. Its parent, listed company PB Fintech Ltd, says it has built India’s largest online platform for insurance and lending products. Policybazaar Insurance Brokers, a wholly owned subsidiary, operates the insurance-broking business behind the platform.
That model came under pressure this week. PB Fintech shares sank 36% on Thursday, hitting the lower circuit, after the Insurance Regulatory and Development Authority of India (IRDAI) proposed sweeping changes to insurance distribution. Other insurance-related stocks also came under pressure, with Turtlemint hitting the 20% lower circuit.
The proposals cover much more than websites. One of the most visible changes concerns what IRDAI calls “dark patterns” – practices that can influence customers into taking actions they may not have intended. Insurers would have to make product features and pricing information available without first requiring customers to submit personal details.
The bigger change is in the economics of distribution. IRDAI has proposed changing insurers’ Expense of Management, or EoM, limits. For general insurers, the basis would shift from gross written premium to domestic gross direct premium income, with the limit falling progressively from 30% to 20% over five years. For life insurers, the proposed limit would move to 15% within two years and 12.5% within five years.
The commission framework would also be recalibrated. Instead of a uniform approach, proposed limits would vary by insurance segment, product, distribution channel and the effort involved in selling and servicing a policy. Insurers and large distribution entities would also have to disclose their commission structures more clearly.
That is where the proposals become particularly relevant to companies such as PB Fintech. PB Fintech says its revenues primarily come from commissions and other fees paid by insurers and lending partners, with commissions from insurer partners governed by IRDAI rules.
IRDAI is also proposing stronger safeguards against mis-selling, including making suitability an enforceable obligation for specified sales, documenting customer requirements and maintaining an audit trail. It has proposed restrictions on compulsory bundling of insurance with credit facilities and changes to incentives for bank and NBFC staff selling insurance.
The proposals could therefore change both the conduct of insurance distribution and its economics. But the eventual effect on insurers and distributors is not yet settled.
The framework is still under consultation, with comments invited until October 25. What remains unclear is how much the economics of selling insurance will change under the final rules.
New Directions
Let’s now move on to manufacturing and other critical economic areas.
For much of the past two decades, India’s economic relationship with China has been a story of things moving in one direction. Chinese machinery, components and electronics flowed into India, supporting everything from manufacturing to consumer electronics. Indian exports to China struggled to keep pace. In 2025-26, India imported $131.63 billion from China and exported $19.47 billion, leaving a trade deficit of $112.16 billion.
Now, there is a small but unusual movement in the other direction. India’s exports to China rose 38.71% to $9.64 billion in the first five months of FY27. Electronics and engineering goods accounted for much of the increase.
The electronics numbers are particularly striking. India’s exports of printed circuit board assemblies, or PCBAs, to China rose more than 40-fold in FY26, to $1.5 billion from $36 million a year earlier. Nearly 80% of India’s total PCBA exports went to China. Overall PCBA exports rose more than 20-fold to $1.9 billion.
But this is a signal, not yet proof of a structural shift. The numbers remain modest relative to the scale of India-China trade. There is also a classification problem. Chinese customs data does not show a corresponding increase in PCB imports from India, with some of the trade appearing under smartphones and telecom equipment. That makes it difficult to establish precisely what is driving the increase.
Still, the broader electronics story provides some context. India’s electronics production rose from Rs 1.9 trillion in 2014-15 to Rs 13.11 trillion in 2025-26. Electronics exports increased from about Rs 38,000 crore to Rs 4.24 trillion over the same period. Government policy is also moving further into components and sub-assemblies: the Electronics Components Manufacturing Scheme has an expanded allocation of Rs 40,000 crore, while 106 projects involving Rs 69,548 crore of investment had been approved by August.
The numbers raise the possibility of a different kind of India-China relationship: not simply importing components from China, but supplying some intermediate products into manufacturing networks that include China.
Whether that is what the recent trade data represents remains unclear.
The electronics story also raises a broader question: when production moves beyond China, how much of that opportunity actually reaches India?
The experience of apparel suggests that the answer is not straightforward. China’s share of global apparel exports fell from 36.9% in 2010 to 27.3% in 2025. India’s share barely moved, from 3.2% to 3%. Bangladesh and Vietnam, by contrast, increased their combined share from about 7% to more than 13%.
China lost a substantial share of the global apparel market. India captured very little of it. Industry analysis points to factors including trade agreements, integrated manufacturing ecosystems, production scale and the ability to meet large orders. India continues to face constraints including fragmented capacity, higher costs and limited depth in parts of the textile supply chain.
The apparel experience is a reminder that China+1 does not mean production simply moves from China to the next available country. It moves where suppliers, capacity and infrastructure already fit the needs of a particular industry.
Electronics may be one area where India’s position is beginning to change. The increase in China-bound PCBA exports is unusual, while the growth in domestic electronics production and exports shows how much the manufacturing base has expanded over the past decade.
But the dependence on China remains substantial. Domestic value addition in electronics is still estimated at around 18-20%, while China supplied at least 80% of India’s imports across 71 electronics product lines in FY26, according to a study by the Koan Advisory Group and the Institute of Chinese Studies.
India is, therefore, building manufacturing capacity while remaining heavily dependent on Chinese inputs. At the same time, some products made in India may now be finding their way into Chinese-linked supply chains.
The recent electronics numbers could mark the beginning of a broader shift. They could also reflect a narrower change in demand or trade classification. Markets and supply chains rarely reveal structural changes in a single data point. For now, the more useful question is whether this new flow broadens across products and persists over time.
Beyond the Factory
Building a factory in India does not mean building the entire supply chain in India. Manufacturing requires more than land, machinery and workers. It also requires reliable access to energy, minerals, components and other inputs, many of which come from abroad. As geopolitics makes some of these supplies less predictable, securing them is becoming part of the manufacturing equation.
That is one reason supply-chain security is becoming relevant to Indian companies looking overseas.
Outbound M&A from India has already reached close to $24 billion this year, according to JPMorgan, putting it on track for a record. Overall M&A in India crossed $100 billion in the first half of 2026 across 680 deals.
The $24 billion figure is not a measure of supply-chain investment. Indian companies are also buying overseas businesses to expand into new markets and industries. But JPMorgan says supply-chain resilience is one of the factors driving the increase, as geopolitical tensions have made access to resources such as critical minerals more important.
The clearest examples are emerging around energy and raw materials. Indian companies are exploring investments in Canadian LNG projects, including ways to access and invest in those projects to secure supplies. Large Indian business groups including Reliance Industries, Mahindra & Mahindra and JSW Group are also exploring investments in Canadian critical-mineral projects as a way to secure supply chains, according to Canada’s trade minister.
The discussions are explicitly about securing inputs that Indian industry may need.
A factory in India can reduce dependence on imported finished goods. It does not eliminate dependence on the minerals, energy or components that go into that factory.
That becomes more important as India moves beyond assembling products and tries to build deeper manufacturing capabilities. More complex supply chains require more specialised inputs, and some of those inputs are produced outside India.
For some companies, overseas investment can therefore serve a purpose beyond acquiring customers or entering foreign markets. It can help secure access to resources that may otherwise remain outside their control.
But this shift is still taking shape. The $24 billion outbound M&A figure includes deals driven by many different motives, and supply-chain security is only one of them. The Canadian projects are also still at the discussion and exploration stage.
For India, the manufacturing footprint is therefore becoming more complicated. More factories may be built at home, while some of the relationships and investments needed to keep them supplied may have to be built abroad.
The factory may be in India. Part of the supply chain feeding it may not be.
Market wrap
India’s stock market benchmark fell for the seventh consecutive week—their longest losing streak since 2020–as oil prices above $100 a barrel and rising global bond yields fuelled concerns of inflation and higher interest rates.
The Nifty 50 lost 0.9% and the BSE Sensex slipped 0.5% this week. The small-cap index shed 0.9% and the mid-caps slumped 2.1%. Before this week, the Nifty 50 had dropped for seven or more weeks in a row only four times in 25 years: in 2020, 2008 and twice in 2001. Its longest losing streak was nine weeks in 2001, according to Reuters data.
As many as 11 of the 16 major sectors fell this week, with financials and information technology stocks logging their fourth weekly losses. IT stocks fell on worries about rising interest rates in the US and AI-related concerns. Financial stocks lost ground on worries that the proposed caps on insurance commission could hurt earnings.
State-run Coal India was the top Nifty performer, rising about 4% on strong demand and earnings outlook. ITC, Eternal, Titan, Dr Reddy’s Labs, and ONGC were among the other gainers.
Bharti Airtel plunged 5.7% to become the worst Nifty performer. Trent was No.2, falling 5.5%. Infosys slumped 4.9% while Bajaj Finserv and Tata Motors Passenger Vehicles slid 4.4% each. Bajaj Finance, HDFC Life Insurance, Adani Enterprises and Max Healthcare were among the other stocks that lost at least 3% this week.
Other Headlines
- Tata Sons rejects Tata Trusts’ claims N. Chandrasekaran’s appointment as chairman was illegal
- SEBI eases foreign investor access to commodity derivatives, widens scope of portfolio managers
- Electric bus maker PMI Electro, used-car platform Spinny confidentially file for IPO
- Steel and construction materials marketplace JSW One Platforms files for Rs 3,054-crore IPO
- Snapdeal parent AceVector cuts IPO size, sets price band at Rs 30-32 per share
- Fintech platform Moneyview cuts IPO size, fixes price band at Rs 32-34 per share
- India-New Zealand free trade pact to come into force on October 20 after ratification
- PhonePe says planning 20,000 new hires to expand merchant network in rural India
- Adani Group to invest Rs 1 trillion in West Bengal by 2035, says chairman Gautam Adani
- Govt cuts edible oil import duty to lower prices ahead of festivals
- Waaree Energies to merge Indosolar into company in deal worth Rs 950 crore
- Ola Electric to consider fundraising via rights issue of shares
- Mumbai High Court rejects Adani plea that duty-free shops are beyond domestic laws
- Aviation ministry places SpiceJet under operational, financial scrutiny
That’s all for this week. Until next week, happy investing!
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