BSE Share Price Soars 18% for Second Consecutive Day Amid NSE's Weekly Expiry Day Delay

Shares of BSE have experienced a remarkable surge, climbing 18% on March 28 to reach ₹5,519. This rally follows a significant proposal from the Securities and Exchange Board of India (SEBI) aimed at modifying the derivatives expiry schedule. The move has compelled the National Stock Exchange (NSE) to postpone its plans for adjusting its weekly expiry day. Financial analysts are optimistic that this development will curb potential market share erosion for BSE.

SEBI’s Strategic Proposal Bolsters BSE

On March 27, SEBI released a consultation paper suggesting that equity derivative contract expiries on any exchange be limited to either Tuesday or Thursday. This initiative is designed to create better spacing between expiry days, mitigate concentration risks, and foster innovation within the market.

Current Situation: BSE’s derivatives currently expire on Tuesday.
NSE’s Previous Plan: NSE intended to shift its expiry to Monday starting in April 2025, but this has now been postponed indefinitely.

Analysts believe that SEBI’s proposal will help BSE maintain its market share by preventing the NSE from adopting a Monday expiry schedule, thus ensuring that Tuesday and Thursday remain the only available options.

Analyst Opinions on BSE

Leading brokerage firm Jefferies has reaffirmed its HOLD rating on BSE, setting a target share price of ₹5,250, which suggests a potential 12% upside from the stock’s price of ₹4,694 as of March 27.

Market Share Concerns: Jefferies contends that SEBI’s proposal could alleviate worries regarding BSE’s potential market share losses, which were previously estimated to impact earnings per share (EPS) by 12%.
Key Factors for Re-rating:
- BSE shares have rebounded significantly from earlier losses.
- Reduced regulatory risks and improved market conditions could clear the way for a stock re-rating.

Motilal Oswal Financial Services (MOSL) also maintains a positive outlook on BSE, emphasizing that SEBI’s proposed changes may bolster the company’s growth trajectory. The timing advantage of BSE’s current expiry schedule over NSE’s would help sustain its market share gains.

Upcoming Board Meeting for Bonus Shares

In addition to these developments, BSE’s board is scheduled to meet on March 30 to discuss the potential issuance of bonus shares. These are additional shares provided to existing shareholders at no extra cost, aimed at increasing stock liquidity and making shares more accessible to retail investors.

Trading Window: BSE has announced that its trading window will be closed for transactions from March 26 to April 1, 2025, in accordance with regulatory guidelines.

Stock Performance Overview

BSE’s stock price soared to a high of ₹5,152.75, reflecting a 10% increase in a single day. Over the course of just two days, the stock has risen more than 15%. Notably, BSE shares have gained over 90% in the past year and have advanced 13% in March alone, following a 13% decline in February.

This positive momentum in BSE’s stock performance highlights the potential for growth, driven by regulatory changes and market dynamics. With a favorable outlook from analysts, investors may want to keep a close watch on BSE as it navigates these pivotal developments.