BSE Share Price Rises 2% Ahead Of Nifty 50 Entry; Passive Inflows In Focus
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BSE shares gained over 2% ahead of the exchange's inclusion in the Nifty 50 from September 30. The rejig is expected to bring passive fund buying, while brokerages have pointed to trading volumes, CAS and regulatory changes as key factors for the stock.
BSE share price: Shares of BSE rose more than 2% on Tuesday, September 29, a day before the exchange is set to enter the benchmark Nifty 50 index.
BSE will replace Wipro in the index from September 30 as part of the Nifty 50's semi-annual rebalancing. The inclusion is expected to bring buying from passive funds that track the index.
Axis Capital estimates that index funds could buy around 15.7 million BSE shares following the inclusion. The potential passive inflow has been estimated at around $657 million.
BSE's six-month average free-float market capitalisation stood at ₹1,40,879 crore, around 1.5 times the figure for Wipro, which was the smallest eligible Nifty 50 constituent.
BSE Nifty 50 Entry: Passive Buying In Focus
The index change comes after a sharp rise in BSE's market value over the past year, although the stock has also seen selling in recent months.
BSE shares had fallen more than 30% from their May peak as of Monday, September 28. The stock declined over 2% in Monday's session before recovering on Tuesday ahead of the Nifty 50 inclusion.
The Nifty 50 inclusion comes at a time when trading activity and regulatory changes remain key factors for the exchange.
The Closing Auction Session (CAS), changes in bank guarantee requirements and the higher securities transaction tax (STT) have been flagged by brokerages as factors that could affect BSE's trading volumes and earnings.
Global Brokerages Macquarie, Jefferies Give Mixed Views
Macquarie has a positive view on BSE and has initiated coverage with an Outperform rating and a ₹4,000 target price. The brokerage expects BSE to benefit from continued market-share gains and estimates revenue growth of 16% between FY26 and FY30. It also expects margins to move towards 70%.
Jefferies has taken a more cautious position, with an Underperform rating and a ₹2,940 target price. It has highlighted BSE's exposure to domestic proprietary traders, who account for around half of its notional turnover, along with the impact of higher STT, RBI's bank guarantee rules and CAS.
BSE's entry into the Nifty 50 will take effect from Wednesday, September 30, making it the first time the exchange will be part of the benchmark index.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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