Goldman Sachs is positive on BSE Ltd., following the Securities and Exchange Board of India's recent proposal to restrict index options expiry days to Tuesdays and Thursdays. This regulatory change is expected to positively impact BSE, enhancing its market position.
SEBI's consultation paper, published on March 27, aims to reduce concentration risk and increase product differentiation by spacing out expiry days.
Goldman Sachs analysts view these developments as favourable for BSE. The exchange had previously faced market share reductions due to SEBI's proposed limits on options open interest. However, with the new SEBI proposal, BSE's market share in index options is expected to improve.
BSE's index options premium market share has increased from 16% in December 2024 to 21% year-to-date, with March 2025 tracking at approximately 22%.
This increase in market share, along with unchanged industry projections, has led Goldman Sachs to raise its average fiscal 2026-2028 Average Daily Premium estimate by 44% and earnings per share by an average of 14%. The firm now projects a 21% EPS Compound Annual Growth Rate for fiscal 2025-2028.
Despite the positive outlook, Goldman Sachs maintained a 'neutral' rating on BSE stock. The brokerage remains cautious, citing a comparatively lower options industry penetration projection.
The SEBI proposal, if enacted, is expected to solidify BSE's position in the market, with the exchange benefiting from the regulatory changes aimed at reducing concentration risk and enhancing product differentiation.
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