India’s capital markets are thriving, with over 18.5 crore demat accounts as of December 2024, despite 53,000 closures. The Nifty 50 index has shown resilience amidst global volatility, and the number of unique mutual fund investors has reached 5.6 crore, reflecting strong investor participation and growth in the sector
Price movement
With a market capitalization of Rs 55,080.58 crore, the shares of BSE Ltd were trading at Rs 4,052 per share, decreasing around 3 percent as compared to the previous closing price of Rs 4,170 apiece.
Brokerage Recommendation
Nuvama, one of the well-known brokerages in India, gave a ‘Buy’ call but slashed target price on this stock from Rs 7,250 apiece to Rs 5,160 apiece, indicating a potential upside of 27 percent from Monday’s price of Rs 4,068 per share.
Recommendation Rational
NSE shifted its derivative contract expiry to Monday, a day before BSE’s, which Nuvama argues may reduce industry volumes as retail traders prefer trading closer to expiry. Meanwhile, BSE’s index option premium market share rose from 16.4 percent in Dec 2024 to 22.1 percent in Feb 2025 after shifting expiry to Tuesday.
NSE’s shift of index option expiry from Thursday to Monday, a day before BSE’s, aims to regain its 83.6 percent market share from December 2024. This change may limit BSE’s ability to capture premiums on non-expiry days, potentially impacting overall market growth.
Nuvama projects BSE’s market share to drop to 18 percent from 22 percent (Feb 2025) and warns SEBI’s derivative exposure limits may hinder growth. It cut BSE’s FY25–27 profit estimates by up to 13.4 percent, lowering the EPS CAGR to 17.1 percent, and reduced the PE target to 40x from 50x.
SEBI, BSE Challenge FIR Order
Recently, SEBI and BSE have approached the Bombay High Court against an ACB Court order directing an FIR against former SEBI Chairperson Madhabi Puri Buch and officials over alleged regulatory lapses in Cals Refineries’ 1994 listing. The High Court granted an urgent hearing on March 4 and temporarily restrained the FIR registration.
The case stems from journalist Sapan Srivastava’s complaint, alleging SEBI failed to act against BSE and Cals Refineries, causing investor losses. SEBI and BSE oppose the order, citing lack of prior hearing and officials’ absence during the listing, and are taking legal steps to challenge it.
Financial condition
Looking forward to the company’s financial performance, revenue climbed by 95 percent from Rs 426 crore in Q3FY24 to Rs 832 crore in Q3FY25 but during the same time, net profit magnified by 106 percent from Rs 106 crore to Rs 219 crore.
Market Dynamics
Increased market volatility persists amid global fragility and geopolitical tensions. The Indian Finance Minister’s budget offers substantial tax relief for the middle class, potentially driving consumption and savings. BSE plans to leverage rising disposable income to boost market participation, fostering a cautiously optimistic outlook.
Business Update
BSE saw 30 new listings in Q3, raising a record Rs 95,512 crore, up 261 percent YoY, with 108 active IPO applications. Average daily turnover in the cash market rose to Rs 6,800 crore, while the derivatives segment hit a record daily premium turnover of Rs 8,758 crore.
Strategic Focus
BSE is focused on enhancing customer experience and operational efficiency through continuous trading system upgrades to handle higher volumes. It is also actively onboarding more Foreign Portfolio Investors (FPIs) and improving premium quality to strengthen its market position and attract greater investor participation.
Future Outlook
The management recognizes challenges in the Bankex segment, with trading volumes down 95 percent, but is confident in rebuilding liquidity through strategic initiatives. Optimistic about 2025, they remain focused on executing their vision to lead India’s capital markets.
Company Profile
The Bombay Stock Exchange (BSE Ltd) is an Indian stock exchange headquartered on Dalal Street in Mumbai. The Company allows the trading of stock, currencies, debt instruments, derivatives, and mutual funds.
Written by Abhishek SIngh
