Focus on business fundamentals, not stock valuations: NSE CEO

NSE Managing Director and CEO Ashish Kumar Chauhan on Friday advised entrepreneurs to prioritize creating profitable, sustainable businesses instead of being sidetracked by short‑term share‑price swings, emphasizing that solid fundamentals are what drive lasting market value.

Describing capital markets as a crucial catalyst for India’s entrepreneurial journey, Chauhan urged startups and MSMEs to consider a public listing as a strategic lever for business growth.

At the JITO Incubation and Innovation Foundation’s (JIIF) Foundation Day event held at the NSE, he stressed that founders should focus on operational performance and profitability, not on daily fluctuations in share price.

“Your business resides in its operations, not its share price; the stock market merely mirrors the business, it does not constitute the business itself,” Chauhan remarked.

He noted that public markets offer growth financing, raise governance standards, boost credibility, aid talent acquisition, and let promoters retain control of their firms.

“Going public enables founders to secure growth capital without relinquishing control, as a promoter may initially sell 25 % of equity, keep 75 %, and dilute further only when the business needs it,” he said.

He added that a listing enhances governance, strengthens credibility, draws analyst attention, and simplifies bank financing.

The process also streamlines succession planning, making it easier to allocate assets among heirs.

“When you list, you retain 75 % and offer 25 % to the market initially; you can sell more later, and control remains with you,” he said.

He said, “public markets assign profitable firms a valuation that private balance sheets cannot achieve. A business generating an annual profit of ₹2 crore could attain a market capitalisation of ₹40‑50 crore after listing, providing the promoter with space to raise capital, bring in partners, and expand operations.”