NSE looks beyond options: Commodities, currencies and EGRs emerge as new growth opportunities

Fresh updates from the financial markets indicate that The National Stock Exchange (NSE) anticipates newer financial products such as commodities, electricity futures, currencies or electronic gold receipts (EGRs) to create fresh expansion opportunities as it reduces its dependence on just transaction-based topline.

Transaction charges accounted for 79% of NSE’s topline over the last five years, according to the exchange’s management. That stated, newer topline streams, including data, are growing faster and now account for around 11% of topline.

“Those are growing at a very fast pace,” the exchange’s chief financial officer stated during a press conference ahead of its initial public offering (IPO). "Now other businesses are coming up and hopefully we will be able to even further diversify."

For FY26, around 90% of NSE’s total topline came from operating topline. Within operating topline, options accounted for 60%, with weekly index options contributing 46%, monthly index options 6% and single-stock options 8%.

Futures contributed another 9% and cash market inflows 9%, while data accounted for 12% and other operating topline made up the remaining 10%.

The management sought to highlight that NSE’s dependence on weekly index options, which is often noted as its biggest topline concentration risk, is softer than the headline options number suggests. Weekly index options accounted for 46% of operating topline, or around 40% of total topline.

At the same time, the exchange sees significant room for newer products to grow.

SIFs, a framework introduced by market regulator Securities and Exchange Board of India (SEBI), could bring more market participants into equity derivatives through a fund structure. NSE stated this could help retail market participants access derivatives in a more controlled manner, given that many individual market participants may not have sufficient knowledge of options trading.

The ETF market is another area where NSE sees substantial potential. Management described India’s ETF industry as “very, very tiny”, leaving room for expansion as financialisation increases.

Gold could provide an even larger opportunity. NSE has rolled out EGRs with the aim of bringing physical gold into a standardised, exchange-traded format. The product is intended to address issues around purity, authenticity and storage while potentially improving the efficiency of gold trading.

The exchange additionally sees EGRs being used as collateral and in securities lending and borrowing. NSE stated it is exploring ways to address the goods and services tax (GST) friction around gold through the product and believes the gold market could eventually become a market worth trillions of dollars.

The broader opportunity, according to the exchange, comes from India’s continued financialisation. NSE stated these trends, along with the expansion of ETFs, SIFs, commodities and EGRs, could help diversify its topline base as India's capital markets deepen.

Overall, the management believes there's a long road ahead for expansion, saying, "“India is a very different market. There's a long runway.”