BSE Ltd witnessed a sharp drop of up to 6.1%, hitting an intraday low of ₹2,500 on the National Stock Exchange, following regulatory changes by SEBI regarding expiry day scheduling for derivatives. However, the stock rebounded shortly after the dip.
Why Did BSE Shares Fall?
The decline came after SEBI approved the proposal to change BSE’s F&O expiry day to Thursday, aligning it with global market norms. Meanwhile, NSE has secured Tuesday as its expiry day. This shift could impact BSE’s market share in derivatives trading, prompting caution among brokerages.
Motilal Oswal Downgrades BSE
In response, Motilal Oswal downgraded BSE to a ‘Neutral’ rating, cutting its target price by 14% to ₹2,300, signaling limited upside from current levels. The brokerage expressed concerns over BSE’s shrinking market share due to the revised expiry calendar.
“We estimate BSE’s market share could drop to 18–19% from 22.6% in May 2025,” said Motilal Oswal, citing recent trends and data from the derivatives market post the March 2025 F&O regulation changes.
According to their data:
- On Wednesday and Thursday (influenced by Nifty expiry), BSE’s market share averaged around 8%.
- On Friday, Monday, and Tuesday, its premium turnover market share was higher: 21%, 24%, and 38%, respectively.
BSE CEO Defends Thursday Expiry
BSE MD & CEO Sundararaman Ramamurthy clarified that the decision to shift to Thursday expiry was taken in the best interest of market participants, especially with NSE requesting Tuesday. He highlighted that Thursday aligns with global trading algorithms and allows investors more time during the week to structure their strategies.
“Thursday expiry has supported market growth historically and fits better with the weekly trading rhythm,” Ramamurthy added.
What Happens Next?
The expiry change will apply only to contracts expiring after September 1, 2025. Existing contracts, including long-dated index options, will be adjusted accordingly. Exchanges will release detailed circulars soon to guide market participants through the transition.
SEBI also reiterated that exchanges must seek prior approval before introducing or modifying contract expiry or settlement days.
Strong Q4 Performance by BSE
Despite the regulatory overhang, BSE delivered a robust Q4 FY25 performance:
- Net Profit: ₹494 crore (vs. ₹107 crore YoY) – a 5x jump
- Revenue: ₹846.6 crore – up 75% YoY
The board also declared a ₹23 per share dividend, including a ₹5 special dividend. The record date was May 14, and payment will be completed by September 18, 2025.
Stock Performance Snapshot
- Last 5 sessions: Down 7.8%
- 1-month return: +6%
- 3-month return: +91%
- 1-year return: +189.5%
Final Word
While regulatory shifts may create near-term volatility, BSE’s strong financials and strategic alignment with global markets could offer long-term stability. Investors should keep an eye on how trading volumes evolve under the new expiry framework.
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