BSE Stock Soars 37% in a Week as NSE IPO Creates Excitement – Here’s Why Investors Are Buzzing

The stock of BSE Ltd, India’s only listed stock exchange, has surged 37% in just seven days (from 13 September to 24 September). The main reason behind this rise is the anticipation of the National Stock Exchange (NSE) launching its own IPO, which will level the playing field between the two exchanges, especially in the derivatives market.

BSE’s stock price jumped from ₹2,902.7 to ₹3,980.15 during this period, making it the top performer on the Nifty Midcap 100 index. Over the past year, BSE’s stock has risen by 233%, ranking third in terms of performance, just behind Kalyan Jewellers (258%) and Suzlon (234%).

This recent growth has pushed BSE’s stock well above analysts’ one-year target of ₹2,836.83. According to Bloomberg, six out of ten analysts tracking the stock gave it a “buy” or “hold” rating.

NSE recently revealed that it had filed for a no-objection certificate with SEBI for its IPO. Additionally, on 13 September, SEBI dropped charges related to a colocation case, which was seen as a hurdle to NSE’s IPO. This ruling has boosted BSE’s stock as investors believe the listing of NSE will bring more attention to the stock exchange industry, benefiting BSE in the process.

Rajesh Palviya, VP at Axis Securities, mentioned that once NSE is listed, it will be on BSE, leading to increased transaction volumes for the latter. This will positively impact BSE’s income.

Another key reason for the stock’s rise is a possible change in the derivatives market. A SEBI panel has suggested limiting each exchange to one weekly options expiry. This would give BSE a fair chance to compete with NSE, which currently dominates the market. If the recommendation is approved, NSE may focus on Nifty while BSE could take over Sensex, further helping BSE’s growth.

In August, NSE controlled 93% of the daily cash market and 75% of the total trading volume, while BSE held 7% and 25%, respectively.

Dhiraj Sachdev, CIO at Roha Asset Managers, believes the growing interest in stock trading, especially among Gen Z, will drive growth in the stock exchange industry. He sees the NSE listing as a way to boost the entire sector, including BSE.