Mutual Funds raise holdings in BSE in Q1 amid sell-off by FPIs
Mutual funds have raised their holdings in BSE to 8.78 per cent in the quarter ended June from 8.52 per cent in the previous quarter. This is the fourth consecutive quarter where MFs have raised their holdings in the bourse.
Foreign portfolio investors, on the other hand, have decreased their holdings in BSE to 11.09 per cent from 13.01 per cent in the same period. The number of FPI investors have decreased from 418 to 395.
In the last one-and-a-half years, after S Ramamurthy assumed charge as chief executive officer, the holding of domestic institutional investors has risen from 0.29 per cent to 10.37 per cent. FPI holding has risen from 8.41 per cent to 11.09 per cent, indicating higher institutional interest.
BSE shares are up 6.3 per cent in the past three sessions, despite the regulator’s proposals to curb F&O trading.
The earnings impact of the proposed measures may be higher for rival National Stock Exchange as the options segment accounts for about 60 per cent of its revenues compared with 40 per cent for BSE, based on FY25 estimates. The measures, however, will reduce BSE’s chances of narrowing the market share gap with NSE in derivatives, said experts.
The bourse has more than 400 members trading its derivative products, representing 36 lakh active clients. It recently made its foray into single stock futures.
“For BSE, removal of Bankex weekly contracts can impact EPS by 7-9 per cent over FY25-27E. In our scenario analysis, gains from spillover of trading activity from discontinued products can offset EPS impact and in the event of moderate industry-wide impact of SEBI measures, can even drive EPS upgrades,” Jefferies said in a recent note.
IIFL reckons BSE’s earnings are likely to compound at 15 per cent CAGR over FY26-28. The brokerage expects a 20 per cent impact on BSE volumes due to the restriction on weekly contracts and a 25 per cent impact on profits.
The exchange was recently asked to cough up more fees on options contracts by the regulator for several years along with interest. The bourse has made a provision of ₹169.8 crore towards this.