BSE shares have crashed about 29% from their peak, erasing Rs 35,000 crore in market worth, whereas NSE’s unlisted shares, among the many largest multibaggers within the unlisted house, have plummeted 22% from their highs, wiping out a staggering Rs 1.4 lakh crore.
The carnage extends far past the exchanges themselves. Shares of low cost brokerage agency Angel One, which derives the majority of its brokerage income from the F&O section, has been hammered 37% from its peak and closed Thursday’s session down 5%.
“The shares had corrected due to the discuss weekly expiry altering fortnightly or decreasing the variety of expiries,” market skilled Neeraj Dewan stated, highlighting the market’s fears over Sebi’s potential strikes to additional limit by-product buying and selling.
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Sebi’s struggle on F&O hypothesis
The regulator’s crackdown, first introduced in October 2024, has been relentless. With 91% of particular person merchants incurring losses price Rs 1.06 lakh crore within the fairness derivatives section throughout FY25, which means a median dealer misplaced Rs 1.1 lakh, Sebi has pulled no punches in its battle towards what it sees as rampant hypothesis.NSE’s dominance within the derivatives house makes it notably weak, commanding a 78% share in choices premium turnover and over 99% in futures premium turnover. The alternate additionally dominates money markets with a 93.5% gross turnover market share as of June 2025.Starting from this month, BSE and NSE have swapped their derivatives expiry days. Whereas many have been anticipating BSE to lose market share because it shifts Sensex expiry to Thursday from Tuesday, the primary week noticed BSE gaining floor.
The alternate’s premium Common Every day Turnover (ADTO) in September’s first week surged to Rs 208 billion—a strong 19% increased than the August common. Extra impressively, BSE’s market share jumped 110 foundation factors to twenty-eight.2%, with the alternate gaining market share on all days besides E-2 (two days earlier than expiry), which was anticipated.
Whereas long-term traders stay structurally bullish on the capital market theme given the rising per capita earnings, financialisation of family financial savings development and growing choice for fairness investments, the present uncertainty out there (ban on Jane Road, potential scrutiny on different gamers and danger of extra rules amid rising retail losses) would weigh on near-term alternate volumes.
Current feedback by the Sebi Chairman expressing choice for longer-tenure contracts have sparked hypothesis in regards to the introduction of fortnightly or month-to-month contracts, changing the present weekly expiries which have been the most important F&O contributor.
“Till there’s regulatory readability, earnings uncertainty stays excessive for exchanges and dependent fashions,” warn market analysts, because the phased implementation of a number of restrictive measures between November 2024 and April 2025 continues to weigh on market sentiment.
The measures embrace discount in derivatives with weekly expiry, enhance in lot sizes, and a 2% hike in excessive loss margins on quick choices contracts on expiry day. Newer adjustments in 2025 embrace upfront assortment of choice premiums and removing of calendar unfold therapy on expiry day.
Road veteran Sudip Bandyopadhyay struck a cautious tone, emphasizing the regulatory and authorities deal with defending retail traders. “The regulator and the federal government are very targeted on defending the frequent man, defending the small investor. There’s a risk working by the considering of the federal government in the event you have a look at banning on-line video games, coming down on F&O in a giant approach as a result of the info reveals that 90% plus individuals lose cash when they’re buying and selling in F&O.”
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He warned that any information indicating potential earnings impacts would have “detrimental results,” noting that alternate shares are “absolutely priced” and weak to regulatory headwinds.
Nonetheless, Neeraj Dewan sees alternative within the chaos: “So long as that isn’t coming, quantity will choose up. I like BSE additionally at these costs, it makes a case for investing in BSE for a bit long-term perspective.”
The Indian capital markets collectively characterize almost Rs 1.3 lakh crore of income and a Rs 50,000 crore revenue pool throughout segments. Over the previous decade, mixture income and income have reported CAGRs of roughly 20% and 25% respectively, pushed by sturdy fairness markets, improved retail accessibility, and supportive rules.
However the golden run seems to be ending. As Bandyopadhyay famous: “Development charges will soften, because the market and regulatory forces weigh.”
The beautiful reversal comes after BSE shares had zoomed an astronomical 3,574% over the previous 5 years, whereas NSE’s unlisted shares had emerged as one of many largest success tales within the unlisted market.
With Sebi displaying no indicators of backing down from its mission to guard retail traders from by-product buying and selling losses, market contributors are bracing for extra volatility forward because the regulatory noose continues to tighten round India’s once-booming F&O trade.
(Disclaimer: Suggestions, ideas, views, and opinions given by specialists are their very own. These don’t characterize the views of the Financial Occasions)
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