New Delhi: Once perceived as the underdog in India’s stock exchange space, the Bombay Stock Exchange (BSE) has undergone a dramatic transformation over the past two years.
Since 2023, BSE’s share price surged from around Rs 400 to a staggering Rs 6,100—a 15x rise. Many leading stock research firms gave “buy” calls till the recent meltdown. Much of this meteoric rally has been credited to strategic alignment with the SEBI under the leadership of Madhabi Puri Buch, and the deft maneuvering of the exchange leadership.
A market veteran said “SEBI’s policy interventions played a pivotal role in reshaping the competitive dynamics between exchanges.”
A major turning point came in June 2023, when NSE changed the expiry day of its Bank Nifty contracts to Friday, in response to BSE’s move to shift its Sensex and Bankex expiries to the same day. However, NSE reversed this decision within days following SEBI’s behind-the-scenes intervention. The resulting exclusivity gave BSE a unique advantage in the derivatives market, significantly boosting trading volumes on expiry days.
SEBI further tipped the scales by restricting exchanges to a single weekly expiry, increasing lot sizes, and eliminating calendar spread benefits—measures that inadvertently positioned BSE’s Sensex contracts as viable alternatives. These regulatory tailwinds led some observers to question whether the playing field was still level.
Another critical boost came when SEBI required brokers to register clients on both NSE and BSE unless they opted out. This seemingly technical directive significantly expanded BSE’s user base and trading volume.
In addition, SEBI relaxed curbs on trading in illiquid small-cap stocks—benefiting BSE, which has over 5,000 listed stocks compared to NSE’s 1,600. These reforms reversed years of stagnation in BSE’s cash market segment. Industry insiders also suggest that large brokers, high-frequency traders, and institutional investors received subtle encouragement to increase trading activity on BSE, further lifting its volumes. Tensions also flared over clearing charges. BSE’s Indian Clearing Corporation (ICCL) allegedly overcharged NSE by Rs 113 crore. NSE waited until Buch’s term ended to take action, ceasing payments and demanding refunds. Meanwhile, BSE had to settle Rs 300 crore in dues to NSE’s clearing arm, with further liabilities looming.
BSE also leveraged a differential pricing model—charging Rs 375 per crore turnover on dual-listed stocks, but a steep Rs 10,000 on stocks exclusively listed on its platform. Despite the disparity, SEBI remained silent. A leading stock broker said, “Now, with Madhabi Puri Buch’s exit and a more assertive NSE, it will be interesting to see if BSE’s dream run continue without regulatory tailwinds.”