India's National Stock Exchange faces short selling ahead of planned IPO; institutions say regulatory pressure will hamper growth

Golden Ten Data July 17th｜The National Stock Exchange of India (NSE) has received a “sell” rating as it prepares to launch India’s largest IPO. The exchange operates the world’s largest derivatives trading market by volume. Indian local brokerage Dolat Capital Market Pvt. began coverage of the NSE and issued a bearish rating, stating that tightening regulation of India’s stock derivatives market will lower trading volumes and lead to a decline in NSE’s market share. Current high stock valuations also limit future upside potential. Over the past two years, India’s derivatives market has undergone a series of major regulatory adjustments aimed at curbing excessive speculation, including increasing contract sizes and restricting weekly expiry settlement of options contracts per exchange to just one benchmark index. NSE has submitted an IPO application, expected to raise around $3 billion, and plans to list in September once it receives approval from the Securities and Exchange Board of India.