Even as a decline in futures and options turnover weighed on the National Stock Exchange’s revenue in FY26, three of its subsidiaries moved into the black, offering early signs that businesses beyond the exchange’s core trading operations are beginning to gain traction.
NSE IFSC Clearing Corporation, NSE Academy and NSE Administration and Supervision turned profitable in FY26 after reporting losses in the previous fiscal, according to the exchange’s DRHP.
The turnaround assumes significance as NSE seeks to diversify its revenue base amid its heavy dependence on derivatives trading. Options contributed about 60% of NSE’s transaction-charge revenue — its largest revenue stream — according to the exchange’s draft offer documents. F&O turnover declined 18% in FY26.
Market experts see the improving performance of NSE’s subsidiaries as a healthy sign for its longer-term growth, though they do not expect these businesses to rival the exchange’s core operations anytime soon.
“The profitability of the subsidiaries shows that they are maturing on their own and not just surviving on NSE support,” said Gaurav Arora, head of research at SAHI.
He said businesses spanning data and analytics, indices and international market access give NSE revenue streams that are less dependent on daily trading volumes. “Over time, that means NSE’s overall profit becomes a bit steadier, and it stops being just a one-trick trading business,” Arora said.
Vinit Bolinjkar, head of research at Ventura Securities, said the subsidiaries turning profitable was encouraging, but expected them to remain relatively small businesses that complement NSE’s main trading operations.
Not all of NSE’s bets have paid off yet. NSE Sustainability Ratings and Analytics and NSEIX Global Access IFSC continued to report losses in FY26.
Arora, however, said losses at such businesses should be viewed in the context of their investment and scale-up phase. They would become a concern only if losses persist for three to four years without a clear path to scale, he said.
For now, NSE’s core business remains overwhelmingly tied to trading activity. The decline in F&O volumes has put pressure on revenue, while recent uncertainty surrounding the closing auction session has also emerged as a near-term concern.
Bolinjkar expects these pressures to be temporary. Over the longer term, however, he does not expect any of NSE’s subsidiaries to become as large as its core exchange business.
One business that could emerge as a more meaningful growth engine is NSE International Exchange (NSEIX), NSE’s GIFT City arm.
Arora pointed to its presence in equity derivatives and strong turnover growth over the past year as indicators of its potential. GIFT City, he said, provides NSE with a gateway to international capital and could eventually develop into a sizeable revenue stream less dependent on activity in the domestic market