Jane Street fallout hits NSE's pre-IPO valuation

Economic Times

11-07-2025

A temporary trading ban imposed by India's securities regulator on Jane Street Group LLC is fueling concerns that volumes in the nation's bustling derivatives market may drop, hurting business at the top exchange.
ADVERTISEMENT Shares of National Stock Exchange of India Ltd., which commands over 90% of the equity derivatives space, have fallen almost 10% from their recent highs in the private market. They are changing hands at about 2,100 rupees to 2,150 rupees apiece, according to Umesh Chandra Paliwal, co-founder of trading platform UnlistedZone.
The drop in NSE's unlisted shares follows a stunning surge since late October, fueled by hopes for a listing of the world's biggest equity-derivatives bourse. Shares recently climbed as high as 2,400 rupees after the exchange sought to settle a longstanding legal dispute with India's securities regulator, a step seen as clearing a key hurdle for its IPO. At that price, NSE was valued at about $69 billion, ahead of global peers like Deutsche Boerse AG and Nasdaq Inc., according to data compiled by Bloomberg.
'The Jane Street issue has led to worry that derivative volumes could be impacted, which directly affects the NSE,' Paliwal said.
The slide in NSE's unlisted shares mirrors the move in smaller rival BSE Ltd.'s publicly listed stock. Shares of Asia's oldest exchange, which marked its 150th anniversary this week, are down 12% since SEBI announced its curbs on Jane Street.
ADVERTISEMENT A Bloomberg index of shares of 12 listed Indian capital markets firms, which includes brokerages and asset managers, is also down about 3% since SEBI's action.
Traders have expressed concerns that the Jane Street episode will prompt the Securities and Exchange Board of India to tighten trading rules further to prevent any instances of manipulation, likely adding to headwinds that have kept NSE's listing plans on hold for nearly a decade.
ADVERTISEMENT Read more: Top Indian Exchange's Valuation Jumps 60% With IPO LoomingAn email and a phone call to NSE's representative went unanswered.
ADVERTISEMENT The exchange has almost 2.5 billion shares outstanding in private markets. Some 64% of that is held by public investors — including local and foreign institutions — and wealthy individuals, according to its website.The NSE earned a profit of about 122 billion rupees on a revenue of 171 billion rupees in the fiscal year ended March, according to its website. Transaction charges accounted for about two-thirds of its top line.
ADVERTISEMENT The regulator temporarily banned Jane Street from the local market, alleging it mislead retail participants through alleged index manipulation. The trading giant has disputed the claims.
The NSE, backed by large investors like Life Insurance Corp. of India and Canada Pension Plan Investment Board, first filed papers for an IPO in 2016. The regulator's investigation into allegations that some high-speed traders gained unfair access to its co-location servers not only derailed the listing, but also led to a six-month ban from capital markets.