NSE or National Stock Exchange Of India Limited is one of the two major stock exchanges in India. It comes under the ownership of many financial institutions like banks and insurance companies. Since its inception in 1992, the NSE has been a vital part of the Indian Finance and share market. It is the world’s biggest derivative exchange by number of traded contracts. NSE has a market cap of $3.27 trillion. Today, you will get to know the revenue model of NSE and how it benefits its revenue.
So without any further ado let’s dive into the revenue model of NSE.
Revenue Model Of Nation Stock Exchange (NSE)
The NSE Revenue model is made to make money without much investment so much so that the biggest expense NSE has to deal with is employee salaries. Here are some ways through which the NSE makes its revenue:
In House Practices
To generate its revenue, NSE offers a bunch of services like trading, clearing and settlement, indices, Exchange listing, financial education and many more. Whenever an investor trades or exchanges via an exchange board, NSE takes what it calls an “exchange Transaction” as a fee for the transaction. NSE charges 0.00335% (on turnover), 0.00195% for futures (on turnover), and 0.053% for options (on premium value).
NSE takes a registration fee from companies that wish to register themselves in the NSE. A company has to pay ₹50,000 upfront and then an annual amount that is decided on the basis of the company’s paid-up capital. This fee can be anywhere from between ₹10,000 to ₹45,000. On top of that, It also charges other fees like subscription fees and membership fees. Another way to collect revenue is to sell data to analyst firms for further analysis.
A source of income for NSE that is often forgotten is the revenue coming from the unlisted share market. The NSE unlisted share price has been a great source of income for the institution. The NSE unlisted share price today is ₹3,550 per share of equity. This allows the investors to earn good money and it also allows the exchange to make money. You can buy NSE unlisted shares today to generate a good ROI (Return on Investment) but only if you do so through the right trading platform. There are a number of trading platforms online but you have to choose your platform wisely as your trading platform can make a huge difference. Only use trusted online trading platforms like Stockify, which provide you with support and safety. Through these practices, a stock market makes a lot of money, in FY23 NSE’s revenue was ₹11,856 crore.
What Makes the NSE Revenue Model Great?
The main reason why NSE’s revenue model is so profitable is because, in a stock exchange, you don’t have to put huge amounts of money into capital investments. You just have to invest in upgrading the technology from time to time and make sure you keep on including new companies and indices because that is what makes money. The more buyers and sellers a stock exchange has, the more it will earn. This is known as the ‘network effect’ and efficient utilisation of this can make a lot of profits. As the volume of buyers and sellers increases, so does the revenue. This is a sticky business, meaning when a person starts investing there are very less chances that he/she will stop investing which makes the stock exchange more money in the long run. On top of that, lower transaction cost means that there is more trade within the exchange which in turn makes customers stay longer and make more money for the exchange.
This is what makes the NSE business model so great. not only does it ensure that the investors make money but it also ensures that companies and NSE itself make good profits too.
Can You Invest In NSE’s Unlisted Shares For A ROI?
NSE is the biggest stock exchange in India and the business model that NSE uses is top-notch which makes it a lot of money with bare minimum capital investments. As we all know NSE is not listed anywhere but that doesn’t mean that you can’t make money through NSE. Moreover, many investors don’t invest in stocks but they invest in the stock exchange which makes sure that if the exchange makes money then the investor will also make money. If you also want to make money through NSE’s profit then maybe you should consider buying NSE’s unlisted shares. NSE’s unlisted share price is around ₹3,550. So if you’re interested in investing in NSE unlisted shares then you should do it through trusted online trading platforms like Stockify which provides you with data and a safe and easy user interface to make your trading seamless..