When investors think of reliable, long-term wealth creation, they often look toward established companies with a dominant market position and strong financials. One such compelling opportunity lies in the unlisted shares of the National Stock Exchange of India (NSE) — an investment many savvy investors are quietly accumulating. But is it truly worth buying? Let’s explore why NSE unlisted shares could not only be a stable investment but also potentially beat benchmark returns with a CAGR of 20-30% over the long term.
1. A Monopoly-Like Business Model
The NSE holds a dominant share — over 90% — in the equity derivatives market in India and a significant share in cash equities. Its near-monopoly status provides strong pricing power, high operating leverage, and a moat that’s difficult to erode. This results in consistent revenue growth and healthy profit margins.
A business that acts as the backbone of India’s growing capital markets is well-positioned to ride the wave of rising financialization and increasing retail participation. The NSE directly benefits from every uptick in trading volume, IPO activity, and investor base expansion.
2. Strong Financial Performance
NSE’s financial track record speaks for itself. In recent years, it has posted double-digit revenue and profit growth, supported by high operating margins (typically above 60%). The company has low debt and generates healthy free cash flows, enabling it to pay dividends and reinvest for growth.
If these trends continue — which is highly probable given India’s capital market expansion — the earnings base could compound at 20-30% CAGR in the coming decade, translating into similar or even higher returns for investors.
3. Upcoming IPO: A Value Unlocking Catalyst
One of the biggest tailwinds for NSE unlisted shares is the anticipation of its upcoming IPO. The exchange has already filed its draft red herring prospectus (DRHP) and is awaiting regulatory clearance. Once listed, NSE could command valuations comparable to global peers like the London Stock Exchange, CME Group, or Hong Kong Exchanges — all trading at premium multiples.
Investors who get in before the IPO could benefit from significant value unlocking, as listing typically brings transparency, liquidity, and a re-rating in valuation multiples. Historically, many unlisted pre-IPO investments have delivered outsized gains when the stock lists on the exchanges.
4. Low Volatility and High Stability
Unlike startups or cyclical industries, the exchange business is relatively immune to economic downturns. Market volatility may affect trading volumes in the short term, but structurally, the growth in India’s savings, investments, and financial markets remains intact.
With no inventory, limited capex needs, and a highly scalable tech-driven model, NSE enjoys stability rare among even listed companies. This makes it a low-risk, high-quality investment for patient, long-term investors.
5. Potential to Beat Benchmark Returns
Given its robust business model, strong financials, and impending IPO catalyst, NSE unlisted shares are well-placed to outperform benchmark indices like the Nifty 50 or Sensex over the long term.
Historical data suggests that high-quality monopoly businesses with deep moats and strong cash flows tend to deliver superior returns, often beating the market by a wide margin. A CAGR of 20-30% over the next 5-7 years is a realistic expectation for investors who enter at current valuations and hold until or beyond the IPO.
⸻
Final Verdict: A Hidden Gem for Long-Term Investors
In a market flooded with speculative bets and short-term plays, NSE’s unlisted shares stand out as a rare opportunity to invest in a blue-chip business before it goes public. For investors seeking stability, superior returns, and exposure to India’s financial market growth story, this could be a smart addition to their portfolio.
While unlisted shares come with lower liquidity and regulatory risks, the potential rewards far outweigh the risks for investors with a long-term horizon.
In short: Yes, NSE unlisted shares are worth buying — and could be one of the most rewarding investments of the decade.
