New Delhi, Sept. 16 -- The much-awaited initial public offering (IPO) of the National Stock Exchange Ltd (NSE) opens this week with a valuation paradox: at Rs.1,700-1,785 a share, NSE is being offered at a roughly 30% discount to rival BSE Ltd on FY27 earnings estimates, despite being nearly three times its size. The apparent bargain, however, comes as NSE's dominant derivatives business faces a weaker growth outlook-and investors have little room for an earnings miss.

The upper end of the price band is about 6% below NSE's latest unlisted market price of around Rs.1,900, fuelling investor interest ahead of the Rs.22,569 crore IPO, which opens on 17 September. Grey market activity suggests NSE could list at an 11-12% premium to its offer...