Dolat Capital has initiated coverage on the National Stock Exchange of India (NSE) with a 'Sell' recommendation, marking a rare bearish stance ahead of the bourse's highly anticipated initial public offering.
The brokerage argues that impending tighter regulations on futures and options (F&O) trading pose a significant risk to the exchange's core revenue drivers.
The bearish call centers on the potential for regulatory crackdowns to crimp trading volumes at the world's largest derivatives exchange by volume.
Dolat Capital suggests that the structural shift in F&O rules could dampen the speculative activity that has historically fueled NSE's growth trajectory, thereby pressuring future earnings and valuation multiples.
This initiation arrives as NSE gears up to launch one of the largest IPOs in recent Indian market history.
Formal marketing for the offering is expected to commence in the coming weeks, with the exchange aiming to capitalize on strong investor appetite for financial infrastructure assets.