By Kimberley Kao
Shares of the National Stock Exchange of India rose Thursday in their long-awaited debut.
NSE, which raised $2.36 billion in the country's second-largest initial public offering, first filed to go public in 2016, but faced delays because of regulatory disputes and legal proceedings.
Its shares rose as much as 5.2% from their IPO price to 1,878 rupees in Mumbai, outperforming the benchmark Sensex index, which was down 1.1%
The IPO was more than five times oversubscribed, with strong demand from institutional investors, NSE data showed. Retail investor sentiment was muted in comparison.
NSE raised 67.46 billion rupees, equivalent to $704.6 million, from anchor investors, with shares priced at the top of their marketed range. Investors included the Monetary Authority of Singapore, the Abu Dhabi Investment Authority and Life Insurance Corporation of India.
NSE's offering is the second biggest in India, after Hyundai Motor India's $3.32 billion IPO in 2024.
Reliance Industries' Jio Platforms, which filed its draft IPO prospectus in June, could be a close rival. Reliance said that up to 270 million new shares could be issued in the IPO.
NSE is India's largest stock exchange by turnover in cash and equity-derivatives markets. Its smaller rival BSE, formerly known as the Bombay Stock Exchange, listed in 2017.
The IPO valued NSE at around $46 billion, placing it among the world's largest listed exchanges.
The highly anticipated listing comes amid macroeconomic uncertainty that has weighed on Indian stocks.
NSE's stock performance on its first day of trading will "depend heavily on the market sentiment", said Apurva Sheth, head of market perspectives and research at Samco Securities.
"Rising bond yields are generally negative for global equities, so this remains an important backdrop," Sheth said.
There have been 175 IPOs on the BSE so far this year, according to the exchange's website.
Emkay Research initiated coverage on NSE with a buy rating and a target price of 2,050 rupees.
Founded in 1992, NSE has demonstrated over decades that its business model can withstand market volatility and regulatory changes to continue driving profit growth, Emkay Research analysts said in a report.
Transaction charges are the main contributor of NSE's revenue, making the exchange sensitive to any regulatory mandates.
"Potential regulatory tightening on highly speculative or high-velocity products, particularly weekly index options, could disproportionately compress top-line growth given the high concentration of transaction charges in the revenue mix," Emkay Research analysts wrote.
Still, India's capital market development and growth have a long runway, with NSE's "dominant leadership position" making its shares attractive, they said.
Write to Kimberley Kao at kimberley.kao@wsj.com