BSE share price jumps 10%, gains for 2nd day as NSE defers plan to change weekly expiry

Shares of Bombay Stock Exchange (BSE) rallied 10 percent on Friday, March 28, ahead of its board meeting scheduled for March 30 to consider the issuance of bonus shares. This surge follows a 5 percent gain in the previous session, reflecting heightened investor optimism.

The potential bonus issue, aimed at boosting liquidity and making shares more affordable, has fueled buying interest in BSE stock. Meanwhile, the Securities and Exchange Board of India (SEBI) released a consultation paper proposing uniform equity derivatives expiry days, which is expected to be favorable for BSE.

BSE Board to Consider Bonus Shares

BSE’s board will convene on March 30 to evaluate the issuance of bonus shares, which are additional fully paid-up shares granted to existing shareholders at no extra cost. Companies typically issue bonus shares to enhance stock liquidity and reduce the share price, making it more accessible to retail investors. In line with regulatory norms, BSE announced that its trading window will remain closed for securities transactions from March 26, 2025, to April 1, 2025, covering both dates.

SEBI’s Expiry Proposal Favors BSE

In a separate development, SEBI’s consultation paper has proposed restricting equity derivative contract expiries on any exchange to either Tuesday or Thursday. This aims to promote ideal spacing of expiry days, reduce concentration risk, and encourage product innovation.

Currently, BSE’s equity derivative contracts expire on Tuesday, while NSE plans to shift its expiry to Monday from April 2025. Analysts believe that the proposed SEBI regulation would prevent a volume loss for BSE by ensuring that NSE cannot adopt a Monday expiry. This would leave Tuesday and Thursday as the only viable expiry days, effectively maintaining BSE’s market share and protecting it from NSE’s influence.

Brokerage Views on BSE

Leading brokerage firm Jefferies reiterated its HOLD rating on BSE shares, with a target price of ₹5,250, indicating a potential 12 percent upside from the current market price of ₹4,694 on March 27.

Jefferies believes that SEBI’s expiry day proposal could mitigate concerns over BSE’s market share loss, which was previously estimated to impact earnings per share (EPS) by 12 percent. The brokerage also noted that while clarity on open interest limits is still awaited, the impact on BSE is expected to be minimal.

Jefferies identified two key factors that could support a re-rating of BSE shares:

• BSE shares have recovered most of their previous losses.
• Lower regulatory risks and improved market conditions could remove the overhang on the stock.

Meanwhile, Motilal Oswal Financial Services (MOSL) maintained a positive outlook on BSE, highlighting that the proposed SEBI changes could sustain BSE’s growth trajectory. With BSE’s expiry ahead of NSE, the benefit of time decay in options trading would remain intact, supporting its market share gains. MOSL added that while the consultation paper’s proposal on entity-level limits poses a potential risk, the overall regulatory changes are likely to be beneficial for BSE.

Stock Price Trend

The stock rallied 10 percent to its day’s high of ₹5,152.75. In just 2 sessions, the scrip has soared over 15 percent. In the last 1 year, the stock climbed over 90 percent. Moreover, just in March, it advanced 13 percent following 13 percent fall in February.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.