While doomsday prophets continue to raise the alarm and spook investors about negative implications for equity markets and interest rate scenarios if the benchmark 10-year US Treasury yield crosses 5%, some analysts feel the fears are overblown.

The 10-year US Treasury yield has risen above 4.9% and is marching towards the crucial 5% level that it had last hit briefly in 2023. Yes Securities issued a contrarian bet, saying the rise in global yields increasingly reflects stronger nominal growth, a structurally higher equilibrium real rate and synchronised global monetary normalisation, rather than deteriorating economic fundamentals or an imminent fiscal crisis.

US nominal growth, resilient consumption and robust corporate earnings provide sufficient cash flow growth to absorb a higher discount rate, while the rise in US r-star to 1.65% supports a structurally higher cost of capital, the brokerage said. It added that markets are already pricing two to three Fed rate hikes over the next year, but this should represent monetary normalisation rather than a financial accident, particularly with credit markets and Treasury demand remaining well behaved.

Also read | Bigger market crash ahead? Analysts weigh how Sensex, Nifty may react if US 10-year bond yield touches 5%

How current environment differs from 2008 financial crisis

Artificial intelligence-led investment in data centres, semiconductors, power and digital infrastructure represents a genuine capex and productivity catalyst, distinguishing the current cycle from the post-Great Financial Crisis period of predominantly liquidity-driven asset inflation, Yes Securities said.

It further noted that strong interest-coverage ratios across major technology companies and contained credit spreads provide additional balance-sheet resilience, while synchronised rate increases globally reduce the risk of a destabilising dollar or emerging market shock.

Will rising bond yields cause a big market crash?

In this background, the domestic brokerage feels a 5% Treasury yield need not be restrictive for equities if corporate revenues and earnings continue to grow, as stronger cash flows can offset a higher discount rate.The domestic brokerage’s base expectation is for the US 10-year Treasury yield to remain within a 4.7-5.2% range, which it views as tolerable cost of capital in a higher growth economy, rather than an equity-market breaking point. The risk profile changes materially only if yields sustainably move towards 6-7%, which would likely signal de-anchored inflation expectations, deteriorating fiscal credibility or a significant increase in rstar, potentially overwhelming earnings and nominal GDP growth, it warned.

Also read |Aswath Damodaran calls Fed rate debate pointless, says stock market adapts quickly to higher rates

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

Ben Shelton outlasted fellow American Frances Tiafoe 4-6, 6-3, 6-3, 7-5 on Friday night to reach his first career Grand Slam final, putting the 23-year-old within one victory of becoming the first American man to win a major singles title since Andy Roddick at the 2003 US Open.

The No. 8 seed’s win over No. 11 Tiafoe in front of a capacity crowd at Arthur Ashe Stadium came on the 25th anniversary of the Sept. 11 attacks, adding an emotional backdrop to an already charged all-American semifinal between two close friends and longtime rivals. Shelton will face top-seeded Alexander Zverev, who beat Karen Khachanov earlier in the day, in Sunday’s final.

A back-and-forth battle between friends

Tiafoe claimed the opening set 6-4, marking the third time in his career he has taken the first set of a US Open semifinal. Once again, it wasn’t enough to get him over the hump. Shelton responded by breaking early in the second set, and though Tiafoe broke right back, Shelton settled in to take the set 6-3 and level the match.

The turning point came in the third set. With Tiafoe serving to stay in the set at 3-5, the two men played an epic 15-minute game that finally ended when Tiafoe netted a forehand, handing Shelton the break and the set 6-3. Shelton landed 82% of his first serves during that stretch, a number that helped fuel his surge through the middle of the match.

The fourth set proved just as tense. Shelton and Tiafoe traded holds deep into the set before Shelton finally broke through, closing it out 7-5. In the final game, with Tiafoe serving at 5-6, Shelton won the first three points to earn three match points. Tiafoe saved the first, but his second serve on the next point floated into the net, sending Shelton into his first Grand Slam final.

Shelton finished the match with 20 aces and 47 winners, converting five of his break-point opportunities against Tiafoe. At one point during the third set, Shelton’s serve was clocked at a stunning 158 mph, which would have set an ATP record, though it was later corrected to 144 mph.

Two friends, one shot at history

Shelton and Tiafoe — teammates on the U.S. Davis Cup squad and friends off the court — shared a long embrace at the net once the match ended. Both had arrived at Friday’s semifinal on the back of grueling five-set quarterfinal wins: Shelton upset defending champion Carlos Alcaraz in a match that didn’t finish until 3:33 a.m. Wednesday, the latest conclusion in US Open history, while Tiafoe rallied from two sets down to beat fellow American Alex Michelsen in a four-hour, 38-minute marathon.

Speaking earlier in the tournament about the depth of American men’s tennis heading into this year’s Open, Tiafoe framed the run by him and Shelton as part of a broader trend rather than an isolated bright spot.

“I think U.S. tennis is in a great place,” Tiafoe said. “So whatever they’re doing aboveboard is great and continue to do so.”

He pointed to a wider group of American contenders carrying the sport forward. “But the guys, we’ve been doing pretty well,” Tiafoe said. “Someone is always going deep in majors. Fritz has been playing great for a long time, Ben and myself. We have Learner. Obviously you have Alex Michelsen, Tommy. There’s a good group of us that are playing really g—” he continued, listing off a roster of young American talent that includes Taylor Fritz, Learner Tien and Tommy Paul.

A milestone beyond the scoreline

Shelton’s win carries significance well beyond the immediate stakes of Sunday’s final. He is the first Black American man to reach a US Open final since Arthur Ashe in 1972, and a win over Zverev would make him the first American man to capture a Grand Slam singles title in 23 years. Shelton is already guaranteed to rise to No. 4 in the world once the tournament concludes, regardless of Sunday’s outcome.

Shelton has now reached the semifinals of a major three times — the 2023 US Open, the 2025 Australian Open and this year’s tournament — but had never previously advanced past that stage. Tiafoe, meanwhile, has now fallen in the semifinals of the US Open on multiple occasions, including a loss to Taylor Fritz at the same stage in 2024, without yet breaking through to a Grand Slam final of his own.

Looking ahead to Sunday

Zverev, the tournament’s top seed, will be playing in his first US Open final since 2020 and is looking to add to a résumé that already includes his first Grand Slam title, won at the French Open in June. Sunday’s final will mark a clash between a proven Grand Slam champion in Zverev and an American crowd favorite chasing a milestone that has eluded the country’s men’s game for more than two decades.

Arthur Ashe Stadium, which was visibly split in its loyalties Friday given the all-American matchup, is expected to fully rally behind Shelton on Sunday. The atmosphere inside the stadium during Friday’s semifinal was already heightened by a string of celebrity appearances, with Shelton noting after the match that the star power in the crowd occasionally pulled his focus mid-match.

For now, the drought remains intact — but for the first time since Roddick’s title run in 2003, an American man stands one match away from ending it on home soil at Flushing Meadows.

Tesla CEO Elon Musk weighed in Friday on a growing industry debate over artificial intelligence’s role in software development, declaring technology the most important advantage in warfare in response to comments from veteran programmer John Carmack about the future of manual coding.

Musk’s remark came after Carmack, the founder and CEO of AI startup Keen Technologies and a longtime figure in computer programming and video game design, published a detailed post on social media platform X arguing that traditional hand-coding skills are becoming less essential as AI tools advance.

Carmack’s martial arts comparison

Carmack framed his argument through an analogy to the evolution of martial arts after World War II, when disciplines that originated as battlefield survival techniques gradually transformed into sports and forms of personal development rather than practical necessities.

“AI is making many other programming skills much less critical,” Carmack wrote. “We aren’t there yet, but carefully writing code completely by hand is moving from a -jitsu to a -do. Code-do? Codo?”

In martial arts terminology, “-jitsu” traditionally refers to techniques developed for combat effectiveness, while “-do” refers to practices centered on discipline and personal growth rather than survival. Carmack used the distinction to suggest that hand-coding may be shifting from a skill programmers need to perform their jobs into something closer to a specialized craft pursued by choice.

Carmack also cautioned programmers against clinging too tightly to manual skills as AI tools continue to improve, warning against becoming “the out of touch Kung Fu master… that gets mauled by an amateur MMA fighter.”

A broader industry conversation about AI and code

Carmack’s comments arrive amid a wider shift in how prominent figures across the technology industry are discussing AI’s growing role in software engineering. Anthropic CEO Dario Amodei said in January that engineers at his company had already stopped writing code by hand, predicting that AI could take over most software engineering tasks within six to 12 months.

OpenAI President Greg Brockman offered a similarly striking data point in May, saying the share of code generated by AI coding tools at his company jumped from roughly 20% to 80% within a single month. Alphabet CEO Sundar Pichai has made comparable claims about his own company, stating that approximately 75% of new code written at Google is now AI-generated.

Not every prominent voice in the industry shares that level of enthusiasm. Minecraft creator Markus Persson, known widely by his online handle Notch, dismissed AI-assisted coding as “an incredibly bad idea” in a January post on X, arguing that the approach prioritizes speed of typing over sound underlying logic.

Musk’s response ties the debate to broader strategic stakes

Musk’s reply to Carmack reframed the coding debate in more expansive terms, tying it to competitive dynamics well beyond the software industry. By describing technology as the “most important advantage” in war, Musk’s comment suggested that the trajectory of AI-driven coding tools carries implications reaching into national security and geopolitical competition, not merely software development practices.

Musk has repeatedly positioned himself at the center of conversations about AI’s transformative potential across multiple ventures, including Tesla’s autonomous driving programs, SpaceX’s engineering operations and his AI company xAI. His comment Friday added another data point to a running public conversation among technology executives about how quickly AI systems are reshaping fields once considered dependent on specialized human expertise.

Automation concerns extend beyond software

The debate over AI’s effect on coding is unfolding alongside broader predictions about automation’s reach into professional work more generally. Microsoft AI chief Mustafa Suleyman has forecast that most professional tasks could become fully automated by AI within 12 to 18 months, a timeline that would extend well beyond software engineering into a wide range of white-collar professions.

Such predictions have fueled ongoing anxiety within the technology workforce about job security and the pace at which AI tools are being integrated into core business functions. At the same time, industry leaders like Amodei and Pichai have framed the shift as a natural evolution of engineering practice rather than a wholesale replacement of human judgment, positioning AI tools as accelerants that still require human oversight, architecture decisions and quality control.

What the exchange signals for programmers

Carmack’s framing suggests a middle path between the extremes of the current debate. Rather than arguing that coding skills will disappear entirely, he characterized the shift as a change in the purpose those skills serve, moving from a practical necessity to something closer to a chosen craft, in the same way that martial arts persisted as a discipline long after most practitioners stopped needing it to survive physical combat.

That framing has resonated with segments of the programming community grappling with how to adapt as AI tools increasingly take on responsibilities once reserved for human developers, including tasks ranging from writing boilerplate code to debugging and even architectural decision-making in some organizations.

Ongoing uncertainty around timelines

Despite the confident predictions from multiple technology executives, precise timelines for AI’s takeover of coding tasks remain a subject of active disagreement. Estimates from industry leaders have ranged from months to a couple of years, and skeptics like Persson continue to question whether current AI coding tools produce code that is reliable and well-reasoned rather than simply fast to generate.

As the conversation continues to play out across social media and industry commentary, Musk’s comment linking the debate to broader questions of technological advantage suggests that discussions once confined to software engineering circles are increasingly being framed in terms of competitive and strategic significance, reflecting how central AI-driven coding tools have become to conversations about technology’s trajectory more broadly.

Multi-cap and flexi-cap strategies dominated the top-performing PMS portfolios in August, with five of the 10 strategies delivering double-digit monthly returns, according to PMSBazaar.

Equity PMS strategies posted strong gains during the month, led by East Green Advisors’ Quant Strategy, which emerged as the best performer with a 14.73% return for the month ended August 31, 2026.

East Green Advisors’ Quant Strategy, a multi-cap and flexi-cap strategy benchmarked against the BSE 500 TRI, topped the performance chart with a 14.73% return in August.

Atlas Integrated Finance‘s Momentum 20 PMS Fund followed with a 14.46% return. The multi-cap and flexi-cap strategy was the second-best performer during the month.

Hem Securities‘ India Rising SME Stars, the only small-cap strategy among the top performers, gained 13.08% in August. The strategy is benchmarked against the BSE 500 TRI.

Jainam Broking’s Jainam Value Maxima, a multi-cap and flexi-cap strategy benchmarked against the Nifty 50 TRI, posted a 12.30% return. Accelt Asset Management’s Long Term Equity Fund rounded out the double-digit performers with an 11.32% gain.
The remaining strategies in the performance list posted negative returns during August. Amaltas Asset Management’s Strategic Opportunities Series 1 fell 4.23%, while Lakewater Advisors’ India Growth declined 5.12%.Omniscience Capital Advisors’ two thematic strategies were also among the weakest performers. Omni Industry Inc fell 3.67%, while Omni Energy Transition declined 4.50%.

Ashima Capital Management’s Long Heritage Value Fund recorded the steepest decline among the strategies listed, falling 7.64% during August.

ALSO READ: Rs 24,600 crore IPO dhamaka: NSE, Hero Motors to lead 11 public offers next week

Worst-performing PMS in August

Ashima Capital Management’s Long Heritage Value Fund was the weakest-performing PMS strategy in the August performance list, declining 7.64% during the month.

Lakewater Advisors’ India Growth followed with a 5.12% fall. Omniscience Capital Advisors’ Omni Energy Transition declined 4.50%, while Amaltas Asset Management’s Strategic Opportunities Series 1 lost 4.23%.

Omniscience Capital Advisors’ Omni Industry Inc rounded out the list of declining strategies with a 3.67% fall in August.

Markets outlook

India’s benchmark equity index Nifty50 faces a heavy-lifting problem. While foreign investor flows could return, crude oil prices may stabilise and bond yields could ease, a durable recovery in the Nifty may remain difficult unless the market’s two heavyweight sectors — banks and IT — begin to participate, analysts said.

Analysts remain divided on the near-term outlook.

The Nifty’s struggle to reclaim the 24,000 mark is beginning to look less like a pause and more like a warning signal, according to Anand James, chief market strategist at Geojit Investments.

“After closing below the rising trendline that had supported the index since April, the benchmark faces the risk of a deeper correction towards 23,260,” James said.

He said 23,800 remains a firm near-term support level, but any recovery would need to push the Nifty above 24,215 for the market structure to turn constructive.

Until then, attempts to bounce could remain short-lived as traders assess whether the index is entering a wider corrective phase.

In contrast, Elara Securities remains bullish on the Nifty despite the index’s prolonged stagnation. Harendra Kumar, managing director and CEO of Elara Securities, expects the index to reach 30,000 over the next 15 months.

Kumar expects the market to deliver a 15%-20% return over the next 15 months, supported by a stabilising rupee, a turnaround in foreign investor flows and resilient corporate earnings.

“Our base case is a 15% to 20% return over the next 15 months. It could go higher, because once momentum picks up, markets can go anywhere,” Kumar said.

He added that the risk-reward currently favours India, particularly as earnings expectations for markets such as the Nasdaq, Dow Jones and KOSPI are expected to weaken after next year.

This article has been written by Kumar Gaurav, who is not a SEBI-registered Research Analyst or an Investment Adviser. Gaurav and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment.

De-dollarisation refers to efforts by countries to reduce their dependence on the US dollar in international trade, finance, and foreign exchange reserves. The topic has gained renewed attention as BRICS nations and several emerging economies explore the use of local currencies and alternative payment systems for cross-border transactions.

For decades, the US dollar has dominated global trade and commodity markets. Most commodities, including crude oil, natural gas, gold, industrial metals, and agricultural products, are priced and traded in dollars. However, rising geopolitical tensions, sanctions-related concerns, and the desire of emerging economies to diversify their reserves have encouraged countries to look for alternatives.

Although the dollar remains the world’s leading reserve currency, a gradual shift toward local-currency trade and reserve diversification could influence commodity prices, investment flows, and global trade patterns.

Why Are Countries Supporting De-dollarisation?

One of the biggest advantages of de-dollarisation is reduced dependence on a single currency. Countries can lower their exposure to dollar shortages and exchange-rate fluctuations by conducting trade in their own currencies.
Using local currencies can also reduce transaction and hedging costs, making international trade more efficient. Another important benefit is greater financial sovereignty. Countries heavily dependent on the dollar-based financial system may be vulnerable to sanctions or policy decisions taken outside their control.

In addition, central banks are increasingly diversifying their reserves by holding more gold and other currencies, helping reduce concentration risk.

Impact on Commodity Markets

De-dollarisation could bring both opportunities and challenges to commodity markets. On the positive side, local-currency trade can reduce dependence on the dollar and insulate commodity-importing countries from sharp currency fluctuations. It may also make trade more flexible during periods of financial stress.However, moving away from a common settlement currency could increase market fragmentation and create greater currency-related volatility. Pricing and settlement across multiple currencies may also add complexity to global trade.

Gold: The Biggest Beneficiary

Among all commodities, gold is likely to benefit the most from de-dollarisation. As countries diversify reserves away from dollar-denominated assets, many central banks have increased their gold holdings. Gold is viewed as a neutral reserve asset that is not tied to any country’s monetary policy.

According to the World Gold Council, central banks purchased a record 1,136 tonnes of gold in 2022, followed by 1,051 tonnes in 2023 and 1,045 tonnes in 2024. Even in 2025, purchases remained strong at 863 tonnes, far above the long-term annual average of 473 tonnes recorded between 2010 and 2021. This sustained buying has become a major support factor for gold prices and could continue if reserve diversification accelerates.

Can the Dollar Be Replaced?

A complete replacement of the US dollar appears unlikely in the near future. The dollar remains the dominant global currency because of the size of the US economy, deep financial markets, and investor confidence in US assets.

Nevertheless, a gradual decline in its dominance is possible as more countries adopt local-currency trade arrangements and diversify their reserves. The United States is unlikely to favour any move that weakens the dollar’s global role, but it cannot prevent sovereign nations from choosing alternative settlement methods.

If de-dollarisation gains momentum, gold demand could remain strong and the influence of US monetary policy on global commodity markets may gradually diminish. At the same time, increased use of multiple currencies could lead to higher volatility in international trade.

India’s Position

India has adopted a balanced and pragmatic approach toward de-dollarisation. The country supports the use of the rupee in bilateral trade and encourages local-currency settlements where practical. At the same time, India has not advocated replacing the US dollar. Given its strong economic ties with both the United States and emerging economies, India’s focus is on reducing transaction costs, improving trade efficiency, and strengthening financial resilience without disrupting access to global financial markets.

De-dollarisation is not about replacing the US dollar overnight. Instead, it represents a gradual move toward a more diversified global monetary system. While its impact on most commodities may be mixed, gold stands out as a clear beneficiary due to rising central bank demand. Although the dollar is likely to remain dominant for years to come, growing local-currency trade and reserve diversification could slowly reshape the future of global trade and commodity markets.

(The author is Head of Commodity Research, Geojit Investments )

Prince Harry and Meghan Markle are reportedly frustrated following a formal letter from King Charles III reaffirming their status as non-working members of the royal family, a development that has since triggered a diplomatic ripple effect after Uganda withdrew from Harry’s 2027 Invictus Games in a show of loyalty to the monarch.

The letter, sent on behalf of the King by the Lord Chamberlain, was issued Monday, Sept. 7, to senior officials across the U.K. government, military and Lord-Lieutenancies, as well as to the Duke of Sussex’s own team. It reiterated that Harry and Meghan remain non-working royals and clarified that their charitable and commercial activities are undertaken in a private capacity.

What the letter said

According to the text of the letter, it has been “well known” since January 2020 that the Duke and Duchess “stepped down from undertaking representative duties on behalf of The Sovereign, and are no longer working Members of The Royal Family.” The letter went on to state that the couple’s position “is akin to private citizens with commercial and charitable interests,” and that this arrangement would “continue to be fully respected.”

The letter also noted that the couple’s royal titles remain “in abeyance and are not used,” and it directed officials to route any questions about privileges the couple might request — particularly those involving public funds — to Buckingham Palace.

A surprise to the Sussexes

A spokesperson for the Duke and Duchess said the couple was caught off guard by the letter, which arrived roughly two weeks after Harry and Meghan relocated back to the United Kingdom following nearly six years living in California. According to reporting on the matter, the couple was not informed in advance of the letter’s contents, and by the time their office was contacted, the document had already been circulated to its intended recipients.

The Sussexes have also indicated a preference for a different label than the one used in the King’s letter. Rather than being described as “private citizens,” the couple reportedly wants to be characterized as “public figures,” a distinction that speaks to ongoing tension over how their post-royal identity should be defined now that they are living back in Britain.

Uganda’s withdrawal from the Invictus Games

The fallout from the letter extended beyond the royal family’s internal affairs this week when Uganda announced it was pulling out of Harry’s Invictus Games, the international sporting competition for wounded, injured and sick military personnel that Harry co-founded in 2014.

General Muhoozi Kainerugaba, Uganda’s military chief and the son of President Yoweri Museveni, announced the decision Wednesday in a post on social media platform X. “In order not to be construed as being opposed to His Majesty King Charles III of the United Kingdom, whom we deeply revere, Uganda hereby withdraws from the Invictus Games,” Kainerugaba wrote. “We shall not participate in anything that does not have His Majesty’s approval.”

Speaking separately to The Times, Kainerugaba was more direct about his motivations. “I have factions in the Ministry of Defence that support that Harry-Meghan nonsense. I had to quash it straight away. I support the monarch. Period,” he said.

The withdrawal came as a surprise to organizers, given that Uganda had only recently joined the competition. The country was welcomed as the 26th nation in the Invictus community, and the first from East Africa, during a ceremony at Chatham House on July 7, 2026, just two months before its announced exit. The Invictus Games are scheduled to take place in Birmingham in July 2027.

A spokesperson for the Invictus Games Foundation told People magazine that, despite the public statement, Uganda had not yet formally notified organizers through official channels. “The Invictus Games Foundation has not received formal notification from Uganda through our established channels and is seeking clarification,” the spokesperson said. “We remain committed to supporting wounded, injured and sick service personnel and veterans around the world.”

A long-standing relationship between Uganda and the Crown

Uganda’s ties to the British monarchy stretch back generations. The country was a British protectorate until gaining independence in 1962, and the late Queen Elizabeth II made her final visit there in 2007 for a Commonwealth heads of government meeting in Kampala, a trip Charles, then Prince of Wales, joined her on. Following the Queen’s death in 2022, President Museveni publicly praised Charles as “our good friend in the conservation of nature” and later sent congratulations on his coronation, citing the “brotherly and cordial relations” between the two nations.

A broader pattern of strain

The Invictus Games withdrawal is the latest in a string of developments that have followed the Sussexes’ return to the U.K. Some commentary on the situation has suggested that Harry’s public response to the King’s letter, in which he reportedly voiced frustration, may have compounded tensions rather than eased them. Broadcaster Angela Levin, discussing the matter publicly, criticized the Duke for what she characterized as an unhelpful reaction to the letter, arguing it risked further complicating both his relationship with his father and the reputation of the Invictus Games itself.

Buckingham Palace has not issued additional public commentary beyond the original letter, and the Invictus Games Foundation has said it is still seeking formal confirmation of Uganda’s decision. Meanwhile, questions remain about how Harry and Meghan’s return to permanent life in the U.K. will continue to intersect with their standing within the royal family, particularly as more countries and institutions navigate the delicate balance between supporting the couple’s charitable work and avoiding the appearance of taking sides in an increasingly public family dispute.

National Stock Exchange’s decision to trim its IPO size and price the issue below earlier market expectations has put the spotlight on whether India’s biggest exchange is choosing a safer listing over an aggressive valuation. The IPO valuation has been cut by about 15%, with the issue priced below the levels at which the stock traded in the unlisted market.

The move comes even as the exchange remains one of India’s most profitable and dominant market infrastructure companies.

NSE MD and CEO Ashish Chauhan said the exchange had invited shareholders to tender shares before filing the draft red herring prospectus. He said bankers advised the exchange on pricing, while the IPO size was based on the shares tendered by shareholders on the day of the updated draft red herring prospectus.

NSE IPO is entirely an offer for sale. The exchange will not receive fresh capital from the public issue. Existing shareholders are selling part of their stake to public investors. That means the issue size depends directly on how many shares existing shareholders are willing to sell. If shareholders tender fewer shares, or decide to hold back more stock before listing, the IPO size comes down.

Size cut reflects shareholder tendering

NSE had earlier proposed an offer for sale of up to 14.89 crore shares. The updated filing has reduced the number of shares on offer to about 12.64 crore. The IPO size is now expected to be around Rs 22,500-23,500 crore, lower than the earlier plan of about Rs 30,000 crore. The offer for sale is likely to represent about 5.25% of NSE’s paid-up capital, compared with nearly 6% earlier.

Chauhan’s comments suggest the size cut was linked to shareholder participation rather than any change in NSE’s need for capital. Since the IPO is an OFS, the exchange itself is not raising money for expansion, technology investment or debt repayment.
Also Read: NSE IPO: Exchange didn’t move an application to trade on its own platform, says CEO Ashish ChauhanFor existing shareholders, the decision to sell less may also reflect confidence in the company after listing. NSE is a rare asset in Indian markets, with a dominant position in equity derivatives, a strong presence in cash equities and deep links to India’s financial-market infrastructure.

IPO pricing set below expectations

Pricing is the bigger investor question. NSE shares have traded at higher levels between 1900-2050 in the unlisted market over the past year, but the IPO is has come at a lower valuation.

“At around 43 times FY26 earnings, NSE would still be valued at a premium to most global exchanges. However, the valuation looks more reasonable when compared with listed Indian market infrastructure peers such as BSE and MCX,” said Ishan Tanna, Senior Associate, Ashika Capital.

That makes the pricing decision a balancing act. If NSE priced the IPO too aggressively, it could risk weak demand from public-market investors or poor post-listing performance. If it prices too low, existing shareholders may feel they are leaving value on the table.

The lower pricing appears to be a pragmatic move to leave some upside for new investors and avoid a weak listing. Large IPOs need wide institutional demand, and bankers often prefer a price that gives investors comfort rather than one that only maximises valuation for sellers.

Derivatives growth under watch

The bigger question is not just valuation, but growth. Around 60% of NSE operating revenue comes from derivatives. That is also a key risk because the options boom is facing regulatory and volume-related headwinds. “The options boom is facing regulatory and volume-related headwinds,” Tanna said.

The derivatives business has been a major driver of NSE profitability. But the segment is closely watched by Sebi because of concerns around retail participation, excessive speculation, expiry-day volatility and market stability.

Any tightening in derivatives rules, changes in expiry structures, transaction charges or position limits can affect trading volumes. For NSE, that makes the revenue base powerful but not risk-free.

“At the revised valuation, investors are essentially betting that NSE can move beyond the options boom and compound through India’s broader financialisation, while leveraging its dominance in equities, indices, data and other market segments,” Tanna said.

Why lower pricing may work

The reduced valuation can help position the IPO better for public-market investors. It gives the market room to price NSE as a high-quality exchange business without forcing investors to fully pay upfront for future growth.

“Lower pricing appears to be a pragmatic move: leave some upside for public-market investors rather than push for a higher valuation and risk weak demand or poor post-listing performance,” Tanna said.

NSE is launching its IPO on September 17, with the anchor book set to open on September 16. The shares are likely to list in the fourth week.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)