Shares of BSE Ltd. and Multi Commodity Exchange of India Ltd. fell sharply on Tuesday after a Jefferies report highlighted the National Stock Exchange's scale, diversification and dominant position across key trading segments ahead of its proposed listing.
MCX shares declined as much as 5.3% to Rs 2,577.50, while BSE fell as much as 4.5% to Rs 3,630.60. At around 1 p.m., MCX was trading 4.9% lower and BSE was down 4.1%.
Jefferies said NSE's listing would “complete the troika” of India's three largest exchanges. NSE, BSE and MCX together account for 97% of the Indian exchange industry's revenue, with NSE alone contributing around 70%.
The brokerage highlighted NSE's broader product mix and dominant market position. NSE commands a 93% share in the cash segment, 75% in equity options and nearly 100% in equity futures. BSE, by comparison, has a 7% share in cash and 25% in equity options. MCX dominates non-agricultural commodity futures and options with around 99% market share.
The report also pointed to the concentration of revenues at the listed exchanges. Equity options account for 65% of BSE's operating revenue, while commodity derivatives make up 91% of MCX's revenue. NSE has a more diversified revenue profile, including equity trading, technology and data services, clearing and listing fees.
NSE has also been expanding in commodities, a segment dominated by MCX. Jefferies noted that NSE has marginally gained share in crude options and commands a 70% turnover market share in electricity futures.
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