Jane Street Exit Weighs on Leading Indian Exchange’s Pre-IPO Valuation

A temporary trading ban on Jane Street Group LLC by India’s securities regulator has sparked concerns about a potential decline in trading volumes in the country's booming derivatives market — a key revenue driver for its leading stock exchange.

The National Stock Exchange of India Ltd. (NSE), which controls over 90% of the equity derivatives market, has seen its unlisted shares fall nearly 10% from recent highs in private markets. According to Umesh Chandra Paliwal, co-founder of the trading platform UnlistedZone, the shares are currently trading between ₹2,100 and ₹2,150 apiece.

This decline follows a sharp rally in NSE’s private valuation since late October, driven by optimism around a long-awaited IPO. The stock surged as high as ₹2,400 after the exchange moved to resolve a longstanding legal battle with the Securities and Exchange Board of India (SEBI) — a step seen as clearing a major obstacle to its listing. At that price, the NSE was valued around $69 billion, surpassing global exchanges like Deutsche Boerse AG and Nasdaq Inc., according to Bloomberg data.

The drop in NSE’s share price mirrors losses at its smaller rival, BSE Ltd., which has seen its publicly traded shares fall 12% since SEBI’s announcement. BSE, Asia’s oldest exchange, celebrated its 150th anniversary this week.

In the fiscal year ending March, the NSE reported a profit of ₹122 billion on revenue of ₹171 billion, with transaction fees making up nearly two-thirds of its earnings.

“The Jane Street issue has triggered concerns that derivatives trading volumes could take a hit, which would directly affect the NSE’s performance,” Paliwal noted.

A Bloomberg index tracking 12 listed Indian capital market firms, including brokerages and asset managers, has also slipped about 3% since SEBI’s action.

Traders fear that the fallout from Jane Street could lead SEBI to tighten trading regulations further, adding new obstacles to NSE’s IPO plans, which have been stalled for nearly a decade.

SEBI accused Jane Street of misleading retail investors through alleged index manipulation, leading to a temporary trading ban. The firm has denied the allegations. NSE, which has around 2.5 billion shares outstanding in private markets, is backed by major investors including Life Insurance Corporation of India and Canada Pension Plan Investment Board. About 64% of its shares are held by public investors, both domestic and foreign.

NSE first filed for an IPO in 2016, but the process was derailed following a SEBI probe into allegations of unfair access to its high-frequency trading servers. That investigation also resulted in a six-month ban from accessing capital markets.

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