National Stock Exch.

By Vivek Kumar M

Sept 24 (Reuters) - The National Stock Exchange of India NSEI.BO is set for a modest 2%-3% gain in its trading debut on Thursday as investors weigh its leading position against slowing derivatives activity, according to analysts and unlisted-share market data.

The 225.6 billion rupee ($2.3 billion) offering, India's second-largest on record after the 2024 IPO of Hyundai Motor's India arm HYUN.NS, marks a key test of investor confidence in the country's biggest exchange operator, whose dominant market position has long underpinned strong growth.

NSE accounts for about 93% of India's cash-equity turnover and 75% of options activity. But derivatives activity has slowed as tighter regulation, higher taxes and concerns over the new closing auction raise questions about NSE's reliance on this market segment for earnings growth.

The so-called grey market, where investors trade IPO shares before their official listing, points to a modest premium for the company's shares, analysts said.

"While the grey market is hinting at a positive listing, we expect the stock to drift down through the day given concerns around moderating earnings growth due to slowing derivatives activity," said Dharmesh Kant, head of equity research at Cholamandalam Securities.

Investors will also watch the expiry of anchor investor lock-ins and how the stock trades as more shares become available after the IPO debut, analysts said.

About half of the $703 million of shares allotted to anchor investors, including the sovereign wealth funds of Norway and Abu Dhabi, will become eligible for trading on October 21. The remainder will be available from December 20.

The IPO was subscribed 5.71 times, drawing bids worth more than $10 billion. Institutional investors led demand, while retail investors bid for only slightly more shares than were available to them.

The NSE will rank among the world's 10 largest listed exchanges and India's biggest listed companies by market value after its debut.

(Reporting by Vivek Kumar M; Editing by Nivedita Bhattacharjee)

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Sept 22 (Reuters) - National Stock Exchange Of India Ltd NSEI.NS:

• NATIONAL STOCK EXCHANGE OF INDIA LTD FIXES IPO OFFER PRICE AT 1,785 RUPEES PER SHARE- PROSPECTUS

Further company coverage: NSEI.NS

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