Synopsis
Goldman Sachs has a positive outlook for BSE following SEBI's proposal to limit index options expiry days. This change is expected to strengthen BSE's market position and reduce concentration risk, potentially increasing its market share.Key Takeaways
- Goldman Sachs projects a bright future for BSE Limited.
- SEBI's proposal aims to limit index options expiry days.
- This regulatory change could enhance BSE's market position.
- BSE's index options market share is on the rise.
- Goldman Sachs maintains a 'neutral' rating on BSE stock.
Mumbai, April 1 (NationPress) Goldman Sachs has forecasted an optimistic future for BSE Limited, in light of a recent initiative by the Securities and Exchange Board of India (SEBI) to limit index options expiry days to Tuesdays and Thursdays.
This regulatory adjustment is poised to enhance BSE's market standing and mitigate concentration risk within this segment.
SEBI released its consultation document on March 27, detailing plans to stagger expiry days for index options.
This initiative is designed to enhance product differentiation and curtail market concentration, which could indeed favor BSE.
According to analysts at Goldman Sachs, this proposal arrives at a pivotal moment for BSE.
“In the past, the exchange encountered difficulties due to SEBI's restrictions on options open interest, which adversely affected its market share,” the brokerage highlighted.
It further noted that with the new regulatory framework, BSE is likely to witness an increase in its index options market share.
Recent data indicates that BSE's index options premium market share has surged significantly, escalating from 16 percent in December 2024 to 21 percent year-to-date (YTD).
March 2025 has shown even greater progress, with an anticipated market share of 22 percent. Fueled by this growth, Goldman Sachs has raised its fiscal 2026-2028 Average Daily Premium forecast by 44 percent.
The firm's estimates for BSE's earnings per share (EPS) have also increased by an average of 14 percent, projecting a 21 percent EPS Compound Annual Growth Rate (CAGR) over the fiscal years 2025 to 2028.
Nevertheless, Goldman Sachs has retained a 'neutral' rating on BSE stock. The brokerage expresses caution due to the relatively low industry-wide penetration of options trading, which may constrain overall growth potential.
If SEBI's proposal is enacted, it is likely to reinforce BSE's market standing, enabling the exchange to capitalize on regulatory initiatives aimed at enhancing market stability and differentiation.
“The ultimate impact will hinge on how efficiently BSE leverages these changes in the upcoming months,” the brokerage firm remarked.
