Jefferies and Nuvama both downgraded BSE shares, citing the STT hike, tighter RBI norms, and the new Closing Auction Session that has already cut options turnover by 12%.
BSE Limited shares fell 0.72 per cent to ₹3,308 on Tuesday, extending a week-long slide as two brokerages downgraded the stock on regulatory changes that are squeezing the exchange's core derivatives business.
Jefferies cut BSE to 'Underperform' from 'Hold' and lowered its price target 16 per cent to ₹2,940. The brokerage cited what it called a triple whammy: the Securities Transaction Tax hike, tighter RBI bank-guarantee norms raising collateral costs, and the new Closing Auction Session that has already cut options average daily premium turnover by roughly 12 per cent in August. Jefferies trimmed its FY27-29 EPS estimates by 5-12 per cent, warning of further downside if market-share gains stall.
Nuvama Institutional Equities independently downgraded BSE to 'Hold' from 'Buy', slashing its price target to ₹3,240 from ₹4,090. The brokerage cut FY27 and FY28 EPS estimates by 6.3 per cent and 15 per cent respectively. Nuvama now models remaining FY27 average daily premium turnover at approximately ₹186 billion, down from an earlier estimate of ₹241 billion. BSE's ADPTV hit ₹181 billion last week, its lowest since January 2025.
The Closing Auction Session, introduced to align Indian markets with developed-market practices, has disrupted BSE's expiry-day trading ecosystem. BSE contracts fell 30.5 per cent week-on-week in the first post-CAS week, from 150 million to 104 million contracts. Nuvama noted that expiry-day trading historically accounts for 70-79 per cent of BSE's weekly contracts, making the exchange disproportionately exposed to CAS-related disruption compared to rivals.
The bearish analyst sentiment arrives just as NSE confirmed BSE will replace Wipro in the Nifty 50 from September 30. JM Financial estimates the inclusion will trigger passive inflows of approximately $650 million into the stock, providing a potential near-term cushion.
BSE's 52-week range stands at ₹2,021.50 to ₹4,446.80. The stock has returned roughly 33 per cent over the past year but fallen over 8 per cent in the past week, reflecting the sharp reassessment of its near-term earnings trajectory.
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