Shares of the Bombay Stock Exchange (BSE), Asia’s oldest stock exchange, soared by up to 9% in Mumbai trading on Friday, extending its weekly gains to approximately 38%.
This surge comes as market participants speculate about the potential initial public offering (IPO) of the National Stock Exchange (NSE) of India Ltd, following its recent acquittal in a legal dispute with regulators, Bloomberg reported.
If NSE decides to go public, it will list its shares on the BSE, as Indian regulations prohibit self-listing. The IPO could take place within the next 12 months, a move expected to boost trading volumes and enhance BSE’s market share.
NSE, the world’s largest derivatives exchange by contracts traded, has faced delays in its public listing due to ongoing investigations, including a recent case where it was accused of providing unfair market access to certain high-frequency trading firms in the early 2010s. Last week, the Securities and Exchange Board of India (SEBI) cleared NSE and some of its former executives of these allegations.
The anticipation of NSE’s public listing has significantly impacted BSE’s stock performance, with shares rallying about 80% this year. This surge has driven BSE’s valuations to over 48 times its one-year forward earnings, making it one of the priciest exchanges globally.