BSE - Consolidating On The Newly Found Right To Win In Derivatives: ICICI Securities

ICICI Securities Report

BSE Ltd. is consolidating on its newly-found traction in equity index options segment. Volume growth has been stellar in Q2 FY24 (index options average daily turnover in Sensex moved from non-existent in May 2023 to Rs 26 trillion in September 2023) and now pricing has also improved substantially (Rs 50/million of premium turnover in April 2023 to ~Rs 260/million on weighted basis as per notification in October 2023).

H2 may witness traction in new products (Bankex) and new distribution channels (large brokerages may add BSE product offering).

We had upgraded the stock in July 2023, basis establishment of right to win in the large equity derivative market of India.

Going ahead, it may have to consolidate its position. Key risk includes any adverse regulatory changes.

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