Centrum initiates 'Buy' on BSE; sees exchanges as catalysts of India growth

Centrum Broking initiated coverage on BSE stock with a 'Buy' rating and a target price of ₹2,475 per share

Centrum Broking initiated coverage on the BSE and gave a bullish call for the sector, citing structural growth in India's capital markets and rising retail participation, even as regulatory interventions temporarily weigh on trading volumes.

 

The brokerage initiated coverage on BSE with a 'Buy' rating and a target price of ₹2,475 per share. Centrum also expects the initial public offering (IPO) of the National Stock Exchange (NSE) in the first half of the financial year 2027 (FY27), with an estimated market capitalisation of ₹5.2-6.7 trillion.

 

"We maintain a positive outlook on Indian stock exchanges," the brokerage said, adding that trading volumes surge across cash, index options, and futures post covid, supported by rising retail participation and greater adoption of systematic investing practices. 

 

 

The growth is structural, underpinned by a fivefold increase in demat accounts, a doubling of individual holdings, robust IPO activity of ₹1.7 trillion in FY25, and strong domestic institutional investor (DII) inflows offsetting foreign institutional investor (FII) outflows, it said. 

Sebi measures curbs growth

However, in FY26 so far, trading volumes have moderated due to regulatory interventions and heightened market volatility, analysts at Centrum Broking said. Since 2021, equity index options have delivered consistent yearly growth, with volumes expanding each year over the last five years. In FY25, yearly expansion slowed to 9 per cent following the new rule that restricted weekly contracts to a single index.

 

The Securities and Exchange Board of India’s (Sebi) measures, such as the rationalisation of weekly derivative contracts and new rules in the currency derivatives market requiring proof of genuine underlying exposure, temporarily dampened activity but improved overall market stability, the brokerage said. The introduction of fixed expiry days has had a limited impact so far, it added.  CATCH STOCK MARKET LIVE UPDATES TODAY

NSE continues to dominate

Despite these headwinds, the competitive dynamics between exchanges are shifting with NSE continuing to dominate, with over 90 per cent share in cash and nearly 70 per cent in index options, alongside a virtual monopoly in futures trading, Centrum said. 

 

However, the BSE has made significant inroads in the options segment, with market share rising from 4 per cent in FY24 to 25 per cent in the first five months of FY26. This gain was supported by regulatory curbs on weekly expiries, contract sizes, and the exit of major liquidity providers such as Jane Street, the report added. 

BSE share price history

The BSE stock rose as much as 0.9 per cent during the day to ₹2,059 per share. The stock pared gains to trade flat ₹2,040 apiece, compared to a 0.13 per cent advance in Nifty 50 as of 9:28 AM. 

 

Shares of the company are at the lowest level since April 21 this year and currently trade at 0.8 times the average 30-day trading volume, according to Bloomberg. The counter has risen 15 per cent this year, compared to a 4.2 per cent advance in the benchmark Nifty 50. BSE has a total market capitalisation of ₹83,288.59 crore.