BSE shares fell 4% at 11:22 am, trading at Rs 3,308.1 after Jefferies downgraded the stock to ‘underperform’. The move was accompanied by a sharp drop in the share price.
Jefferies cut its rating and lowered the target price by 16% to Rs 2,940 from Rs 3,520. It also trimmed the FY27‑29 earnings per share estimates by 5‑12%.
The downgrade was based on risks to BSE’s revenue. Domestic proprietary traders, who account for nearly half of the bourse’s notional turnover, are affected by higher securities transaction tax (STT) and new RBI norms on bank guarantees. Changes to the closing auction session also add pressure.
BSE’s options average daily traded turnover is down 12% month‑on‑month in August. Market share gains outside the T+0 and T+1 days have slowed, indicating a slowdown in growth.
The closing auction is a 20‑minute session introduced earlier this month. It replaces the previous method of using the average price of the last 30 minutes of trading and aims to provide a fairer closing price and better execution for large orders.
However, the new mechanism has raised concerns about thinning participation and potential losses for some market players.
Jefferies warned that BSE’s revenue from domestic prop traders could be at risk due to the STT hike, RBI bank‑guarantee norms and the changes to the closing auction session.
Overall, the downgrade signals caution for investors and highlights how regulatory and structural changes can impact BSE’s financial outlook.