Shares of BSE Ltd. and Multi Commodity Exchange of India Ltd. (MCX) fell sharply on July 7 after Jefferies published a report highlighting the competitive strengths of the National Stock Exchange (NSE) ahead of its proposed initial public offering (IPO). The brokerage believes NSE has a more diversified business model, stronger market positioning, and higher profitability compared with other listed exchange operators.

By midday trade, BSE shares had declined around 3.8%, while MCX shares were down approximately 4.5%. Both stocks were among the top losers on the Nifty Capital Markets index, which also traded lower during the session. Shares of Angel One and Groww also witnessed declines of around 3%.

According to Jefferies, NSE commands over 90% market share across most exchange segments, with the exception of index options and commodity futures and options. Its clearing corporation also maintains a dominant position, accounting for approximately 88% market share in the cash segment and 91% in the futures and options segment.

The brokerage noted that NSE has developed a technology and data business comparable with leading global exchanges, with these offerings contributing around 13% of its revenue in FY26. Overall, NSE accounted for nearly 70% of India's exchange industry revenue and offers a broad range of products across equity cash, equity derivatives, commodity derivatives, bonds, and currency markets.

Jefferies also highlighted that NSE's higher clearing market share and stronger premium generation in equity options have enabled the exchange to deliver superior profitability compared with BSE. After adjusting for one-time regulatory settlement expenses related to the colocation and dark fiber cases, the brokerage estimated NSE's normalized operating EBITDA margin remained stable at around 76% to 77%.

The report further noted that derivatives have become the primary revenue driver for Indian exchanges, contributing nearly 70% of operating revenue in FY26. Equity options trading has grown at a significantly faster pace than the cash market over the past six years, making exchange earnings increasingly linked to market volatility and trading activity.

NSE has filed draft papers with the Securities and Exchange Board of India (SEBI) for an initial public offering estimated at around ₹30,000 crore. Jefferies said the listing would complete the presence of India's three major exchange operators in the public markets.