NSE’s Infrastructure Expansion and GIFT Nifty’s Record-Breaking Milestones

NSE, which is the largest stock exchange globally in terms of orders and trades per day, often handles more than 50 per cent of the total orders and trades across all global exchanges.

The National Stock Exchange of India (NSE) is laying the foundation for a massive leap forward, both in terms of its domestic operations and its global footprint. With a strategic focus on bolstering infrastructure and enhancing trading capabilities, NSE is executing two significant developments: the expansion of its colocation data center at its Mumbai headquarters and the record-breaking performance of its international segment, GIFT Nifty.

Colocation Rack Capacity to Triple in 3 Years

In a move aimed at maintaining its technological superiority, NSE plans to nearly triple its colocation rack capacity at its Mumbai headquarters over the next three years, sources said. The current facility, located at Exchange Plaza, Bandra Kurla, offers 1,400 colocation racks to its trading members. The planned expansion will boost this number to over 4,000 racks, offering additional infrastructure to accommodate the growing demand from members.

The colocation facility allows trading members to place their servers within NSE's data center, ensuring faster access to market data and a significant reduction in latency. This advantage is crucial in an environment where high-frequency trading and algorithmic strategies depend on split-second decisions. The expansion will also scale NSE's capacity to handle order messages from 5 million per second to 20 million per second across asset classes, ensuring the infrastructure can cope with the ever-growing trading volume.

This move is driven by feedback from NSE’s members, who have expressed the need for more racks to enhance their trading operations. "The expansion will enhance the ease of operations and increase the availability of racks for trading members," a source said. This step will enable NSE to maintain its competitive edge in handling large volumes of trades globally and to ensure seamless trading experiences for its members.

GIFT Nifty's Record-Breaking Milestones

While the domestic infrastructure upgrades are aimed at ensuring NSE's leadership in India, the exchange’s international presence has also been setting new records. On September 24, 2024, GIFT Nifty achieved an all-time high open interest of $20.84 billion (Rs 1.74 lakh crore), surpassing its previous record of $18.50 billion set just a day earlier. Additionally, GIFT Nifty recorded a single-day turnover of $22.72 billion (Rs 1.9 lakh crore) on the same day, another testament to its exponential growth.

Since the launch of its full-scale operations in July 2023, GIFT Nifty has become a crucial part of NSE's international operations. Located at GIFT City, Gandhinagar, NSE International Exchange (NSE IX) hosts GIFT Nifty as a platform for trading Indian Single Stock Derivatives, Index Derivatives, and other global financial instruments. In just over a year, GIFT Nifty has witnessed a cumulative volume of over 26.61 million contracts, with a total cumulative turnover of $1.15 trillion as of September 24, 2024.

The surge in open interest and daily turnover at GIFT Nifty is a clear reflection of the increasing trust global investors have placed in NSE’s international platform. As the demand for Indian assets continues to grow, GIFT Nifty has positioned itself as a go-to platform for international investors looking to tap into India’s growth story. The platform’s exponential growth since the commencement of full-scale operations in 2023 speaks volumes about its role in reinforcing India's global financial footprint.

Disclaimer: The article is for informational purposes only and not investment advice.