• NSE not cheap on its own:

  • 42.1× TTM earnings

  • ~2.3% adjusted FY26 FCF yield.

• Cheaper than BSE:

  • 42.1× vs ~49× TTM P/E

  • BSE is growing much faster, so part of that discount is justified.

• Pricier than most global exchanges:

  • CME and ICE trade near 22–23×

  • Other major exchanges generally below NSE’s 42× valuation.

The question: Does NSE’s dominance, margins and network effects justify paying 42× earnings when BSE is growing faster and global peers are cheaper?

Our view: Exceptional business, fair price — not a bargain.

2. NSE IPO Details

Because this is a pure OFS, there is no dilution from new shares, but NSE also receives none of the IPO proceeds.

• Existing shareholders selling 12.64 Cr shares, reduced from the 14.89 Cr shares proposed in the June DRHP.

• Price band ₹1,700–1,785

  • At ₹1,785 — issue is worth ₹22,569 crore

• Minimum investment @ ₹1,785 = ₹14,280 (lot size of 8 shares )

• IPO opens: September 17, 2026

• IPO closes: September 21, 2026

• Market cap at ₹1,785 ~₹4.42 lakh crore

• Listing exchange: BSE

3. NSE Financials: PAT 11% & Revenue 6% CAGR FY24-26

3.1 FY25 Boom, FY26 Reset

• Trading activity weakened across major segments in FY26.

  • Cash-market ADTV fell around 6.6%

  • equity-futures ADTV around 14.2%

  • options-premium ADTV around 7.7%.

• Transaction-charge revenue consequently declined.

• This fits the broader slowdown after regulatory measures tightened India’s derivatives market.

Reported EBITDA includes income beyond the core exchange operation, while NSE’s normalized operating measure adjusts for items including associate gains and regulatory costs. We therefore use reported EBITDA for historical performance and normalized operating margins as a check on underlying profitability.

3.2 Is NSE’s Earnings Slowdown Reversing?

Q2 FY26 was the trough.

PAT has since recovered from ₹2,098 Cr to ₹3,120 Cr

In Q1 FY27, revenue from operations grew 13.1% YoY to ₹4,560 crore, operating EBITDA grew 15%, and PAT increased 6.7% to ₹3,120 crore. EPS rose from ₹11.81 to ₹12.61.

That’s encouraging, but Q1 revenue was still below Q4 FY26.

The trend is best described as:

FY25 boom → FY26 slowdown → early FY27 recovery.

4. Absolute Valuation:

All valuation calculations below use the ₹1,785 upper end of the IPO price band.

4.1 Is a PE of 42× Earnings Too Much?

• NSE’s Q1 FY27 TTM P/E = 42.1×

  • That is clearly a premium valuation.

  • Lower end of price band at ₹1,700 still implies ~40× TTM earnings.

  • There is no obvious margin of safety in the short term from P/E.

• NSE’s FY27E P/E = 35×

  • Annualized Q1 FY27 EPS = ₹12.61*4 = ₹50.44

  • That is more reasonable, but still not obviously cheap.

4.2 What Does Free Cash Flow Say?

For NSE, reported operating cash flow is distorted by large movements in clearing-member margins and settlement obligations.

So conventional CFO minus capex overstates shareholder-available free cash flow.

A more useful analytical proxy is:

PAT + depreciation & amortisation − regular capex

For FY26:

₹10,302 Cr PAT + ₹624 Cr D&A − ₹587 Cr capex = ~₹10,339 Crore

That implies:

Adjusted FCF yield ≈ 2.34%

and:

Price / adjusted FCF ≈ 42.7×

Including the ₹926 crore MMRDA land advance lowers the FCF yield to roughly 2.1%, but that isn’t recurring capex.

The takeaway is straightforward:

FCF doesn’t reveal hidden cheapness. NSE is valued at roughly 42–43× both earnings and adjusted FCF.

4.3 How are Forward Valuations Looking for NSE?

If NSE sustains its Q1 FY27 EPS of ₹12.61 through the year, FY27 EPS would be around ₹50.44.

That would mean roughly:

21% EPS growth over FY26

and:

35.4× earnings at ₹1,785

A 35× P/E can be reasonable for a high-quality market leader growing earnings at 20%+.

But there is a catch.

FY27 is a recovery year off a weaker FY26 base.

Sustaining 20%+ EPS growth every year through FY30 would be a much harder ask.

And because NSE already commands a premium valuation, there may be limited room for further P/E expansion.

The investment case therefore depends increasingly on earnings growth rather than re-rating.

If earnings growth slows after FY27 while the P/E compresses, much of the operating growth may not translate into shareholder returns.

Investors buying NSE are therefore betting on both continued earnings growth and continued premium valuation.

5. Relative Valuation: NSE vs BSE

BSE is the most relevant Indian peer for NSE

• BSE has more listed companies and a stronger SME IPO count.

• But NSE is larger where trading liquidity and monetisation matter.

• Its cash-market ADTV is more than 13× BSE’s, revenue is around 3.4× larger, and passive assets linked to NSE indices are more than three times BSE’s.

• NSE is the dominant incumbent.

• BSE is the faster-growing challenger.

• That distinction explains much of the valuation gap.

The large FY26 valuation discount narrows on FY27 earnings.

NSE gives investors greater scale and dominance.

BSE gives investors much faster current growth.

On forward earnings, investors may be paying fairly similar multiples for those two different profiles.

6. NSE vs Global Exchange Valuations

Global exchanges aren’t perfect peers.

Companies such as Nasdaq and LSEG have larger data, technology and index businesses, while mature markets have very different growth profiles. NSE’s DRHP itself warns that global exchange comparisons aren’t directly like-for-like.

Still, they are useful as a valuation reality check against NSE at 42.1×

Approximate TTM P/E as of early September 2026:

• Singapore Exchange~38×

• LSEG~32×

• Nasdaq~27×

• CME~23×

• Cboe~23×

• ICE~22×

NSE therefore trades at a premium to almost every major global exchange operator.

That premium may be justified by India’s faster capital-market growth, NSE’s dominant market share and unusually high profitability.

But it reinforces one point:

42× is a premium exchange valuation.

BSE makes NSE look cheaper.

Global peers make NSE look expensive.

7. NSE IPO: Is ₹1,785 a Fair Price?

The answer depends on what you compare it with.

• TTM P/E of 42.1× — Not cheap

• Adjusted FCF yield ~2.3% — Not cheap

• NSE vs BSE FY26 — Looks attractive

• NSE vs BSE TTM — Moderately attractive

• NSE vs BSE FY27E — Little valuation advantage

• NSE vs global exchanges — Expensive

So we wouldn’t call NSE undervalued.

But neither does ₹1,785 look unreasonable for a franchise of this quality.

The main risk is multiple compression: NSE’s earnings may grow, but if the P/E falls at the same time, much of that growth may not translate into shareholder returns.

8. Our View:

NSE is an exceptional business at a fair price — not a bargain.

At ₹1,785, there is more value on a relative basis than on an absolute basis, but even that relative advantage becomes less compelling once BSE’s faster growth and global exchange valuations are considered.

Don’t subscribe simply because it is NSE.

A great company bought at the wrong price can still be a mediocre investment.

At ₹1,785, NSE looks fairly priced for its quality—not obviously mispriced in your favour.

For eligible employees, the ₹170 discount improves the equation materially. At an effective price of ₹1,615, NSE trades at approximately 38.1× TTM earnings, giving employees a much better starting valuation.

If you want to share any suggestions about the MoneyMuscle, or if there are any specific stocks you’d like us to cover, just send an email to hi@moneymuscle.in

Don’t miss reading our Disclaimer

Bharat Coking Coal Limited (BCCL), a flagship subsidiary of Coal India Limited (CIL), is hitting the primary market with its Initial Public Offering (IPO). Given its dominant position in the coking coal sector and its crucial role in India’s steel growth story, should you subscribe to this “Mini Ratna” PSU?

In this BCCL IPO review, we will look at its business, financials, strengths, risks, and valuation to determine if it’s a buy or avoid.

BCCL IPO Details

• IPO Date: January 9, 2026, to January 13, 2026

• Price Band: ₹21 to ₹23 per share

• Minimum Investment: ₹12,600 (at the lower price band of ₹21) or ₹13,800 (at the upper price band of ₹23)

  • Lot Size (600 Shares)

1. The Quick Verdict

Recommendation: SUBSCRIBE with Caution

Primarily for Long-Term Dividends

BCCL is a strategic national asset, holding the only source of prime coking coal in India. While the FY25 numbers suggest a massive bargain, the Trailing Twelve Months (TTM) performance indicates that the “deep discount” has largely evaporated due to a sharp profit slump in H1 FY26. However, at a P/E of ~17x (TTM), it still sits at par with the industry average while offering a superior competitive moat. It remains an attractive play for those seeking a steady PSU dividend stream and a bet on India’s steel expansion.

2. BCCL Valuation Check — Attractive vs. Fully Priced

The valuation of BCCL is a “tale of two halves.” Depending on whether you look at the record-breaking FY25 or the recent TTM (Trailing Twelve Months) performance, the picture changes significantly.

Market Cap at ₹23: ₹10,711.1 Cr | Enterprise Value (EV): ~₹11,191.2 Cr

• P/E Perspective:

  • P/E Ratio: 8.64x for FY25 vs 17.41x for H1 FY26 TTM

  • FY25 earnings (EPS ₹2.66), the IPO is a steal at 8.64x.

  • H1 FY26 earnings crash (PAT fell ~83% YoY), TTM P/E has jumped to 17.41x.

  • Stock is no longer “cheap”—it is fairly priced relative to the industry.

• EV/EBITDA Perspective:

  • EV/EBITDA: 4.75x for FY25 vs 7.76x for H1 FY26 TTM

  • Mining is capital intensive, making EV/EBITDA a vital metric. At 7.76x TTM, BCCL is reasonable, providing some comfort to value investors.

• Asset Value (P/B):

  • P/B Ratio: 1.63x for FY25 vs 1.84x for H1 FY26 TTM

  • Net Asset Value (NAV) down from ₹14.07 in Mar-25 to ₹12.52 in Sep-25

  • At ₹23, you are paying 1.84x book value — a standard multiple for a high-moat PSU

• Free cash flow:

  • FY25 — BCCL had a positive FCF of ₹26.31 Cr

    • OCF of ₹796.49 Cr minus Capex of ₹770.18 Cr

    • For an expected post IPO market cap of ₹10,700+ Cr — the free cash flow yield is not attractive

    • In simple terms: BCCL is spending almost everything it earns on new equipment, leaving very little actual cash for the business.

  • H1 FY26:

    • BCCL reported a negative operating cash flow of ₹334.930 Cr.

    • Cash was tied up in working capital.

Verdict on Valuation: Based on TTM H1 FY26 performance, the valuation is fair. If BCCL goes back to FY25 levels in FY27. From a longer-term the valuations will start looking attractive.

Caution: The IPO is presented to be very attractive based on FY25 earnings.

3. The “Good”: Why You Should Invest in BCCL

• Strategic Near-Monopoly: BCCL accounts for 58.50% of India’s domestic coking coal production. As the only source of “Prime Coking Coal” in India, it is an essential partner for steel giants like SAIL and Tata Steel.

• Strong Balance Sheet: Despite a recent spike in short-term working capital borrowings (₹1,559.1 Cr), the company has no long-term debt and remains fundamentally robust.

• Dividend Yield: PSUs are mandated to pay 30% of PAT as dividends. Even with the TTM profit dip, the yield at a ₹23 entry price is expected to be healthy (Estimated 3% - 4%).

• Modernization Moat: The shift toward Highwall and Longwall technology and the addition of new washeries (7 MTPA capacity coming up) are aimed at improving coal quality and margins, which should offset rising costs..

4. The “Bad”: Risks You Must Know

• The H1 FY26 Slump: The sudden drop in H1 profit (₹123.8 Cr vs ₹748.7 Cr YoY) is a major red flag. While the RHP blames heavy monsoons, it also highlights the volatility and operational sensitivity of the Jharia mines.

• 100% OFS Structure: All IPO proceeds go to Coal India Ltd. BCCL receives zero fresh capital to manage its aging infrastructure or the ongoing Jharia fires.

• Environmental & Safety Hazards: The Jharia coalfields suffer from legacy underground fires and land subsidence. This isn’t just an ESG concern—it’s a direct threat to production stability.

• Contingent Liabilities: With ₹3,598.59 Cr in claims (primarily tax and royalty disputes), an adverse court ruling could significantly erode the company’s net worth.

• Customer Concentration: 84% of revenue comes from the top 10 customers. BCCL is heavily reliant on the health and procurement policies of other state-owned power and steel utilities.

Final Thoughts

If you only look at the FY25 P/E of 8.6x, the BCCL IPO looks like an absolute bargain. However, a more responsible analysis using TTM metrics (P/E of 17.4x and EV/EBITDA of 7.7x) shows the stock is being offered at Fair Value.

Subscribe if you are looking for a defensive, dividend-paying utility stock and believe the H1 FY26 profit dip was a temporary, weather-related anomaly.

Avoid if you are looking for high-growth momentum or are concerned about the environmental liabilities and proceeds not being used for company growth.

IPO Dates: Dec 12 – Dec 16, 2025
Price Band: ₹2,061 – ₹2,165
Minimum Investment: ₹15,155 (approx. for 1 lot)

ICICI Prudential Asset Management Company (AMC) is hitting the markets with a ₹10,602 crore IPO. As India’s second-largest mutual fund house by assets, this is a marquee event.

1. The Quick Verdict

Recommendation: SUBSCRIBE with Caution

Subscribe for

1. Listing Gains

2. Pedigreed company for the long term

Caution about

1. Premium valuations — even though priced reasonably compared to industry leaders like HDFC AMC

2. Cyclical industry dependent

The IPO is . The company is a high-profit machine with robust growth, making it a solid addition to a long-term portfolio.

2. Valuation Check — OK Valuations

The most critical question for any IPO is the price. Let’s break down the math for ICICI Pru AMC.

• The P/E Ratio: At the upper price band of ₹2,165, the company is valued at a Price-to-Earnings (P/E) ratio of 40.4x (based on FY25 earnings).

• Forward View: If we look at expected earnings for FY26 (based on current growth), the P/E drops to 33.1x.

How does it compare to peers?

• HDFC AMC: Trades at ~45x P/E (More expensive).

• Nippon Life AMC: Trades at ~41x P/E (Similar price).

• UTI AMC: Trades at ~20x P/E (Cheaper, but lower profitability).

Conclusion on Price: You are getting a top-tier brand at a slight discount to the industry leader (HDFC AMC). The pricing leaves some room for listing gains.

3. The “Good”: Why You Should Invest

Here are the strongest arguments for applying:

• Incredible Efficiency: The company boasts a Return on Net Worth (RoNW) of 82.8%. This is best-in-class. It means they require very little capital to generate massive profits.

• High-Margin Product Mix: Over 55% of their assets are in Equity schemes. Equity funds charge higher fees than Debt funds. This ensures higher profitability compared to peers.

• The SIP Machine: With monthly SIP inflows of ₹48 billion, the company has a steady, recurring income stream that protects it during volatile months.

• ICICI Bank Power: Being a subsidiary of ICICI Bank allows them to sell products through 7,200+ bank branches. This is a massive distribution advantage.

4. The “Bad”: Risks You Must Know

• 100% Offer for Sale (OFS):

  • The IPO is entirely an exit for promoters (ICICI Bank & Prudential).

  • Not a single rupee from this IPO will go into the company to help it grow.

  • While the company is cash-rich and doesn’t need capital, a exit suggests the promoters believe this is a “good price to sell.”

  • If the insiders are selling at ~40x Earnings, they likely see limited explosive growth ahead that would justify holding on for a higher valuation later.

• Market Dependency:

  • Asset management is a cyclical business.

  • If the stock market crashes, their Assets Under Management (AUM) value drops, and their fee income falls with it.

• Indian Premium:

  • Indian AMCs trade at massive premiums (40x-45x P/E) compared to global giants like BlackRock or T. Rowe Price, which often trade at 15x-20x P/E.

  • If foreign investors (FIIs) decide that Indian AMCs are overpriced relative to global growth standards, there could be a sector-wide de-rating. Paying 40x earnings for a cyclical financial business leaves zero margin of safety.

• Regulatory Risk: If the regulator forces mutual funds to lower their fees “Total Expense Ratio” , ICICI Prudential’s profit margins will drop immediately.

5. Future Outlook: Can it Grow?

To make money at this price, the company needs to keep growing.

• The Hurdle: To justify this valuation in two years (FY27) the hurdle is not high

  • ICICI Prudential company needs to grow its profits by ~20% annually.

  • Current Reality: In the first half of FY26, their profits grew by ~22%.

• The View: The company is currently growing fast enough to justify the price tag. As long as Indian savers continue moving money from bank deposits to mutual funds, ICICI Prudential will be a primary beneficiary.

Don’t like what you are reading? Will do better. Let us know at hi@moneymuscle.in

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Wakefit Innovations IPO Details

• Price Band: ₹185 – ₹195 per share

• Lot Size: 76 Shares

• Minimum Investment: ₹14,820 (at upper band)

• Pre-IPO Placement Price: ₹195 (Important benchmark)

1. Wakefit — Financial Health & Performance

• Revenue Growth:

  • Wakefit has demonstrated impressive top-line growth.

  • Revenue from operations grew from ₹8,126 million (FY23) to ₹9,863 million (FY24) and ₹12,736 million (FY25).

  • The revenue for H1 FY26 stands at ₹7,240 million.

  • CAGR of ~25%, which significantly outpaces the industry average.

• Profitability Turnaround — This is the most critical factor.

  • loss-making in FY23, FY24, and FY25 (Loss of ₹350 million).

  • However, for H1 FY26, Wakefit posted a Profit After Tax (PAT) of ₹355.74 million.

  • Turnaround driven by operating leverage and reduced burn.

• EBITDA Margins: EBITDA has improved drastically.

  • FY23: Negative

  • FY25: 7.13%

  • H1 FY26: 14.25%. The doubling of EBITDA margins in the latest half-year suggests the company has achieved economies of scale.

2. Valuation Analysis of Wakefit

• P/E Ratio: Since the company was loss-making in FY25, a trailing P/E cannot be calculated. However, if we annualize the H1 FY26 Earnings Per Share (EPS) of ₹1.15 to approx ₹2.30 for the full year:

  • Forward P/E: ₹195 / ₹2.30 ≈ 84.7x.

• Peer Comparison: Sheela Foam (Sleepwell) as a peer, trades at a P/E of 100x+.

• Assessment: Wakefit is asking for a valuation lowerr than the established market leader (Sheela Foam). However, Wakefit is growing much faster (29% vs Sheela Foam’s single digits/low double digits) and is a D2C-first brand, which typically commands a scarcity premium.

• Pre-IPO Benchmark: The company placed shares with institutional investors (like DSP India Fund) at ₹195 per share in November 2025. The IPO upper band matches this price exactly, suggesting the pricing is fair relative to what institutions recently paid.

3. Business Strengths of Wakefit (The “Buy” Case)

• Omnichannel Strategy: Unlike pure e-commerce plays that struggle to scale, Wakefit has successfully expanded offline. Revenue from offline channels (COCO stores) is now ~40%, while online is ~60%. This hybrid model reduces dependency on digital marketing costs.

• Market Leadership: They are the largest D2C home and furnishings company in India by revenue.

• Vertical Integration: They manufacture their own mattresses and furniture (full-stack), which allows better quality control and higher gross margins compared to trading companies.

• Category Expansion: They have successfully moved beyond just mattresses into furniture (sofas, wardrobes) and home decor, increasing the “Share of Wallet” per customer.

4. Key Risks (The “Caution” Case)

• Sustainability of Profits: The company has only just turned profitable in the last 6 months (Sept 2025). Investors need to be confident that this is not a one-off pre-IPO window dressing but a sustainable trend.

• Competitive Landscape: The sector is highly competitive with unorganized players, legacy brands (Sleepwell, Kurlon), and deep-pocketed competitors like IKEA.

• OFS Component: A large portion of the IPO is an Offer For Sale (OFS) by early investors (Peak XV, Verlinvest). While profit-booking is normal, heavy selling can sometimes signal limited upside in the near term.

5. Final Verdict: Subscribe for Long Term?

Subscribe for Long Term — A polite way of saying that the value in the short to medium term is already captured by the seller. Nothing much for the investor in the IPO.

Recommendation: You decide for yourself if you want to subscribe for the long term