BSE Shares Surge 10%; Brokerages Warn Of F&O Speculation

Shares of Bombay Stock Exchange (BSE) rallied by 10% during Thursday’s trading session despite SEBI’s taming into retail F&O speculation. However, brokerages cautioned of F&O hangover behind the stocks wherein several catalysts are vying towards offsetting harsh consequences while sustaining their premium valuations.

While NSE’s option premium turnover can get impacted by 40%, BSE could touch 20%, said IIFL securities. It added that the impact on its income will be miniscule following the recent tariff increase. For FY26ii EPS (Earning Per Share), the brokerage for NSE can see an impact of 20% while for BSE it stands at 5%.

The company added, “On revised earnings, BSE trades at 42 times FY26ii EPS – but given the potential for earnings upgrade (25-30 per cent driven by further tariff hike + faster market-share gains) we believe premium valuations would sustain. With the key overhang behind and scope for further penetration (currently only 30mn investors trade in cash market and 10m in Equity derivatives) the long term growth potential remains intact."

Notably, IIFL Securities surged by 9.74% to trade at ₹4,235 on BSE.

Maintaining a “Neutral” stance on BSE, Motilal Oswal Financial Services Limited (MOFSL) said that for BSE earnings, the hit would be miniscule even if the derivatives volumes drop by 20% instead of 22% built-in forecast. MOFSL added that this will happen provided the notional turnover ratio increases from 0.072% to 0.09%.

IIFL Securities told BSE that it has fixed ₹3,250 per crore of premium turnover, which is 7% higher than FY26ii assumption. The brokerage added, “Note that BSE tariff is 7 percent lower than NSE, and to that extent it has headroom to further increase tariff and mitigate the earnings risk."

MOFSL said that it has increased the share of its derivatives market to 27% with respect to its turnover and by 13.3% in terms of premium turnover in September. This step has been taken to bring product innovation in which they launched the expiries on different days vs the existing days products of NSE.

It also added, "With now only one benchmark index will be available for launch of weekly expiry, NSE/BSE will continue with Nifty/Sensex. Earlier since NSE had an expiry on all days except Friday, BSE found it difficult to scale up volumes. Nevertheless, BSE will now have three more days to compete against NSE. Product innovation could be an alternative wherein new contracts can be launched on new indices with monthly expiries in different weeks. For BSE, since large volumes were happening on expiry day, its premium to notional turnover ratio was at 0.07 per cent against 0.16 per cent for NSE (Sep’24)."