New Delhi, July 17 -- National Stock Exchange of India Ltd. (NSE), the operator of the world's largest derivatives exchange by trading volume, has received a 'sell' recommendation just as it gears up to launch the country's biggest initial public offering.

Dolat Capital Market Pvt., a local brokerage house, initiated coverage on India's largest stock exchange with a bearish call saying tighter regulations on the country's equity derivatives market would crimp trading volumes and lead to a decline in its market share. As such, the rich valuations that the stock currently commands leaves little room for upside, it added.

Analyst recommendations on unlisted companies are uncommon in India and globally, making the call stand out ahead of li...