BSE share price tanks 6% post F&O expiry shift; here's why

BSE Ltd shares fell 6 per cent in Wednesday's trade as stock brokers noted that the shift in futures & options (F&O) expiry to Thursdays from Tuesdays is expected to result in a loss of market share for BSE in terms of premium turnover, which stood at 22.6 per cent in May 2025.

BSE shares fell 6.17 per cent to hit a low of Rs 2,500 apiece on NSE. But the stock recovered some ground and was later trading at Rs 2,621.50 apiece, still down 1.61 per cent.

UBS has maintained its 'Buy' rating on BSE with target price of Rs 2,633, saying new expiry day can impact BSE's market share gain momentum and can mathematically hit 15 per cent of volumes on loss of one trading day for BSE.

Stock analysts observed that following the implementation of new F&O regulations effective March 2025, BSE’s daily share of weekly volumes remained in the 18–22 per cent range during weeks when markets were open all five days.

“Currently, each trading day contributes 18–22 per cent to the week’s total premium volume,” noted Motilal Oswal Financial Services Ltd (MOFSL). “BSE’s market share stands at around 8 per cent on Wednesdays and Thursdays, and 21 per cent, 24 per cent, and 38 per cent on Fridays, Mondays, and Tuesdays respectively. Based on current day-wise volume trends, we estimate a market share loss of 350–400 basis points for BSE.”

Meanwhile, Goldman Sachs maintained a Neutral rating on BSE and reduced its target price from Rs 2,490 to Rs 2,430. The brokerage expects BSE to lose approximately 300 basis points in market share due to the shift of the F&O expiry day to Thursday. It also cut its FY26 earnings per share (EPS) estimate by 2 per cent, stating that the risk–reward outlook remains balanced.

Jefferies has maintained a Hold rating on BSE with a target price of Rs 2,900, citing a potential 5–10 per cent impact on volumes in the near term. However, the brokerage believes that BSE’s ability to build liquidity in longer-dated contracts could help offset this decline over time.

“We have lowered our premium average daily turnover (ADTO) estimates for FY26 and FY27 to Rs 13,700 crore and Rs 15,700 crore, respectively, from Rs 15,500 crore and Rs 19,000 crore earlier,” said Motilal Oswal Financial Services Ltd (MOFSL). “This translates into a 9 per cent and 12 per cent cut in our earnings estimates for FY26 and FY27.”

Following the recent rally, BSE shares are trading at an estimated 53 times FY27 earnings per share (EPS), which is significantly above both historical averages and valuations of global peers. Citing this overvaluation and the expected impact of regulatory changes effective from September 2025, MOFSL has downgraded BSE to Neutral and revised its target price to Rs 2,300.