BSE takes steps to try increase market share

BSE has long been struggling against NSE, which has a dominant market share.

  • In derivatives, BSE’s Average Daily Turnover (ADT) in FY 23 was Rs 1.38 trillion as against Rs 153.5 trillion of NSE i.e., 9% market share
  • In cash market, BSE’s ADT during FY 23 was Rs 4,132 cr vs Rs 53,434 cr at NSE i.e., 7.2% market share

Over years, it has tried taking various measures to try addressing the gap, without much success. It’s latest measures under the newly appointed MD & CEO (Sundaram Ramamurthy), include the following –

  • It has re-launched future and options on the Sensex and Bankex that expire on Friday instead of Thursday. This way it would not directly compete with NSE, where the expiry happens on Thursday.
  • BSE’s Sensex Contract sizes are kept lower at Rs 6 lakh compared with Rs 9 lakh of Nifty – targeted towards a wider participation.
  • BSE has also reduced tick size on some share to reduce the impact cost. It has reduced tick size to 1 paisa for stocks priced below Rs 100 from March 1. Earlier 1 paisa tick was only for stocks less than Rs 15.

Prima facie, the initiatives do look interesting.

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