Posted on March 5, 2025, by Niftynews
BSE Shares Fall Dramatically: The Impact of NSE’s New F&O Expiry Days
Shares of BSE Ltd dropped sharply by 9.39% today, bringing the stock price down to Rs 4,035.10 and lowering the market capitalization to approximately Rs 55,000 crore. This decline marks a massive 35% drop from the 52-week high of Rs 6,133.40 on January 20, 2025, and a 30% dip in just the last month.
Why BSE Stock Is Falling: NSE’s Change in F&O Expiry Days
The steep fall in BSE shares can be traced back to the National Stock Exchange (NSE) recent decision to shift the expiry days for Nifty, Bank Nifty, and other derivative indices from Thursday to Monday. This change, effective from April 4, 2025, has led to a notional correction in the market, negatively impacting BSE’s performance.
Along with Nifty and Nifty Bank, NSE also changed expiry days for indices like FinNifty, Nifty Next50, and Nifty Midcap Select. The shift is causing uncertainty in the market, and the resulting volatility has affected BSE’s stock price.
Impact of Market Volatility and Legal Uncertainties on BSE Stock
Legal Issues Affecting BSE’s Stock Price
BSE has also faced significant challenges due to ongoing legal uncertainties. A Mumbai court recently ordered authorities to file a First Information Report (FIR) against former SEBI Chairperson Madhabi Puri Buch, two BSE officials, and others regarding alleged irregularities related to granting listing permissions to a company in 1994. This legal issue has added to investor concerns, contributing to the declining stock price.
Regulatory Changes Impacting BSE Stock
Further weighing on the stock is the uncertainty surrounding regulatory changes proposed by SEBI. These potential changes have sparked fears that they could disrupt BSE’s business operations, putting additional downward pressure on the stock.
Goldman Sachs Lowers Price Target for BSES hares
In light of the ongoing challenges, Goldman Sachs has downgraded its price target for BSE shares from Rs 5,650 to Rs 4,880, maintaining a ‘neutral’ stance on the stock. The downgrade is due to softer-than-expected industry volumes in cash and options markets, particularly in February 2025.
BSE’s Strong Earnings Despite Market Challenges
Despite the challenges facing the company, BSE has posted strong quarterly earnings. For the three months ending December 2024, BSE reported a net profit of Rs 220 crore, a significant increase compared to the previous year. Additionally, the company achieved its highest-ever quarterly revenue of Rs 835.4 crore, marking a 94% year-on-year increase.
Quarterly Performance: Revenue and Profit Growth
BSE also reported a 2.35% year-on-year increase in its average daily turnover, which stood at Rs 6,800 crore during the December quarter. Analysts from HDFC Securities have pointed out that while BSE’s quarterly results were stronger than expected, future revenue growth could be impacted by the expected decline in SGF (Settlement Guarantee Fund) contributions.
Analyst Ratings: Mixed Outlook for BSE
HDFC Securities Reduces Revenue Estimates
HDFC Securities has revised its revenue estimates for BSE, especially in terms of cash volumes and book-building revenues. However, the brokerage upgraded its earnings forecast, citing a rise in options volumes and improved margins. They have set a target price of Rs 5,280, with a ‘reduce’ recommendation.
Sharekhan Shifts Outlook to Positive
In contrast, Sharekhan has upgraded its view on BSE from ‘neutral’ to ‘positive’ following the company’s Q3 earnings report. Sharekhan believes that the shift to long-duration contracts and an improvement in premium turnover will drive strong revenue growth. This shift is expected to lower clearing and regulatory costs, boosting margins and facilitating earnings growth in the future.
Conclusion: What Lies Ahead for BSE’s Stock Price?
The outlook for BSE’s stock remains uncertain, as external factors, including NSE regulatory changes, legal issues, and market volatility, continue to pressure the company. Despite posting strong earnings in recent quarters, the company’s stock performance is heavily influenced by shifting market conditions and investor sentiment. Investors should stay updated on BSE’s developments to better navigate the potential risks and rewards in the coming months.
