Dolat Capital Market Pvt. has assigned a 'sell' rating to National Stock
Exchange of India Ltd (NSE) as the bourse prepares what would be India’s largest
IPO. NSE operates the world’s largest derivatives market by volume. Dolat warns
that tighter regulation of Indian equity derivatives will depress trading
volumes and reduce NSE’s market share, and says current high equity valuations
limit upside. Recent regulatory moves cited include increases in contract size
and a rule restricting weekly-expiring option contracts to one benchmark index
per exchange. NSE has filed for an IPO of about $3.0bn and plans to list in
September subject to SEBI approval.
