← Throughline · holding view Deep analysis ↗ Q1 FY26
BSE BSE Limited · Other Q1 FY26 · concall
Pattern: regulatory thought process bse

FY26 closed at Rs.5,148cr (+59%).

2 deflections · 3 weak · 8 clean — pushback across 5 of 13 Q&A turns

Focused evidence 5 of 13

Devesh Agarwal · IIFL Capitalweak

Could you help us understand the regulatory thought process around further regulations, especially in the light of sustained retail participation and losses? What as an exchange are you advising the regulators - whether to let the current set of regulations play out and then implement more regulations?

In India, regulatory process is a consultative co-created process. We are not big enough to advise the regulators. But certainly, when there is a consultation, we do participate and we give our views, which helps in shaping up the regulatory atmosphere. Starting from November till April, we have been implementing multiple changes, which were brought in place based on the co-created process. This has resulted certainly in a change in the paradigm, with some amount of cooling off. Whether that is adequate or not is a question we need to continuously ask. What would be the regulatory process and what all could come out as regulation is something we will not be able to predict. Whether there will be room for more regulatory evolutions, that cannot be ruled out because this has been a consistent process. As and when a consultative process starts, we will certainly contribute from our side the best way in which the derivatives market healthily develops as a good hedging and arbitrage mechanism, helping in the stabilization of the cash market and thus serve an economic purpose.

Devesh Agarwal · IIFL Capitaldeflection

On the Phase-2 or derivative 2.0 regulations which have gone live from 1st of July, what is your assessment in terms of a likely impact on the volume of that - in terms of future adjusted equivalent open positions as well as the gross limits and the net limits that were introduced?

That is too early for us to comment, we have to wait for some more time to understand how it evolves.

Shalini Gupta · East India Securitiesweak

I was wondering the substantial increase in turnover volume we have seen is driven by derivatives, but specifically which data point in derivatives? Contracts are down more than 20% but the average ADTV is up and turnover is up almost 30%. Which specific data point reveals why your sales have gone up from turnover?

For the index derivative contracts, you may please look at the premium turnover to derive the revenue numbers. Our charges are flat with respect to derivatives, so you can take it from our website. As far as the costs are concerned, you may please look at the notional turnover for computing the regulatory costs and the contracts traded for computing the clearing and settlement costs. You may please reach out to us offline, and we will probably be in a better position to give more clarifications.

Sanketh Godha · Avendus Sparkweak

We have seen a 50-basis point improvement in our cash market share from June to July. Can you say whether that has happened largely because of common contract note, or is it a usual trend of market share? And can you give some color on the co-location tracks - how much we have, how much we are expected to add? And do you see any impact on premium realization due to Tuesday-Thursday swap?

On common contract note: it is too early to say that common contract note has contributed for this. We have been making multiple efforts in garnering institutional support and also ensuring the retail participation gets a level playing field. Common contract note regulatorily provided a level playing field for institutions. But unless and until it is backed with proper SOR and best price execution, it is not going to translate into any meaningful avoidance and removal of the concentration risk seen in the market. On co-location: we started with no meaningful data center or colo racks. We built it over a period of time and currently have allocated around 350 racks, some 15 kVA, some 6 kVA, which has been fully taken up by the market. We are in the process of putting in place around 140 more racks in two tranches. One probably within a month's time and another before the end of this financial year. On Thursday: since Thursday was found by the market participants to be a good day for us to take, we have gone with their verdict. Thursday has been the expiry day traditionally for the most successful contract of this country. So, if I am getting it on a platter, why should I not take it?

Shalabh Agrawal · Oxbow Capitaldeflection

What can be the second order impact on your volumes and premium turnover because of this Jane Street regulatory issue? And does it impact our co-location business in the future because we were expected to have these HFTs?

Honestly, I don't have an answer for this question as to what you call a second order impact because the Jane Street order came at least some 10-15 days before now. Whatever impact we are seeing, we are not seeing any specific impact arising out o f Jane Street at least as what we could recognize. It is more of the market factors that are dealing with it. Co-location requirement would be based on what the demand and supply is and what the utility of the product. Our estimate is we are better off with whatever number of Colo racks that we are manufacturing now, and that should take us for a good while. This estimated demand is not after Jane Street. It was much before we planned it at the beginning of the year and I think our plan stands well.

▸ Other Q&A (8)
Prayesh Jain · Motilal Oswal Financial Services

The clearing house expenses in this quarter seem to have declined, while the number of contracts traded on the derivative side have not fallen as much. How should we read this and how should we model this cost going ahead?

The transaction charges we get is based on the premium. The clearing and settlement charges we pay is based on the number of contracts traded. The contract size has gone up. When the contract size goes up, the value traded goes up. In times of volatility, because of multiple reasons, including global issues with regard to people fighting with each other, countries fighting, trade tariffs, etc., the premium traded goes up. When the contracts continue to grow but are of larger size, larger volume is processed with lesser cost and larger revenue because of increased premium. This results in clearing and settlement cost as a percentage of revenue coming down. More volumes have shifted from expiry day to non-expiry days, so the quality of premium increases and improves. Due to volatility, the premium also goes up. Both of these result in better realization, whereas the number of contracts traded remaining the same, the cost comes down.

Devesh Agarwal · IIFL Capital

Will it be right to say that at this point in time, there is no consultative process which has been ongoing to implement further regulations?

You will be right to say that at this point of time, no consultative process has been started at all on this. If any changes have to be made and asked to be done, certainly a consultative process will happen and the regulators will co-create a meaningful regulatory framework, good for all of us.

Amit Chandra · HDFC Securities

What will be the mix of options volume in terms of contribution from weekly and monthly contracts in the overall volumes, and can you give some color in terms of what will be the volume from HFTs, retail, proper institution in terms of options contribution?

The HFTs contribute for around 35% and the retailers contribute a bit shy of 25%-26%. The remaining comes from the prop and other traders. As far as the mix of long-term versus the current week expiry volumes, BSE is a very late entrant into the derivative journey. Building long-term contracts is an effort and it takes time. It was a very big effort for us to build the weekly volumes itself. The weekly volumes have grown well and the next week and next week volumes are picking up. Other than current week volumes currently hover between 2% to 2.5% on a regular basis and our feeling is that with the type of effort we are putting, we will be able to grow the mix more towards the other than weekly options and our efforts are on in this direction.

Gurpreet Sahi · Goldman Sachs

On the regulatory expense at Rs. 116 crores for this quarter - would we be fine with assuming that they level for the quarter? In other words, is this set of numbers a clean number for us to model the regulatory expense?

The regulatory charges represent the turnover fee we are paying to the regulators. It is a fairly simple number available from the public domain. You will be able to compute it and model it very easily. For cash market, what is the methodology, and for the derivatives market, what is the methodology, all are available in public domain. So, if you are able to track the volumes we trade on a daily basis, and if you have to model it, it will be as simple as it and as straight as an arrow.

Madhukar Ladha · Nuvama Wealth

The admin expenses have come down pretty significantly in Q1. What is happening there and what sort of run rate should we be building in?

Expenses appear to have come down because there was a one-off expenditure in the previous quarter. The number which is reflecting in P&L, you can assume it should continue at the same level.

Neeraj Toshniwal · UBS

On co-location, how much is currently utilized - in terms of utilization, what kind of revenue can we expect this year from co-location services?

We have allotted 350 racks already. We will not know how many of them are fully utilizing it from whatever our estimate - at least 75% to 80% of it is being used because we see some of the racks getting populated. But we will be coming out with some 140 racks further. We charge Rs. 12 lakh per annum for a 6 kVA rack and Rs. 25 lakhs for a 15 kVA rack. Roughly around 10% of the total racks would be around 15 kVA racks. So you can estimate revenue based on that. Roughly it should be around Rs. 12 crores for quarter one. That is my rough estimate.

SK Debnath · Individual Investor

The clearing and settlement expense compared to the previous year - June 24 quarter was 1017 against which in this current quarter has been 707. This has reduced quite a bit. What is the reason for it?

There are two things which are contributing to it. One is the contract size was very small in the year-on-year last quarter. So, in Q1 2024, the contract size was smaller. And since we are paying the clearing and settlement charges based on the number of contracts traded, that contributed to a higher amount of charges for the same notional value traded. Second, since we were at that point of time in the initial stages of inception, most of our volumes were concentrated on the expiry date. As you would appreciate on expiry day, the theta is a declining trend and a smaller number, because of which the premium value traded will always be small for the same notional number. The income earned is based on the premium traded. So your income goes up whereas your settlement charges come down. The reduction in clearing and settlement expenses as an absolute number can be mainly attributed to the change in the contract size.

Rattan Joneja · CoValue Technologies

What is the growth in numbers of FPIs and when do we see the equity cash segment come to a significant size?

We have been working very hard for getting increased number of participants in the market. Market share and profits and revenues were all second order for us. From a place where we did not have any member at all, today we are very happy to tell you that we are having 528 members who are participating with us. There are around 7.9 million UCCs registered. From no FPI situation, today we are having 330 FPIs who are participating in the market with us. In Q1 FY'24, we had 200 members. Today, we are having around 528 members. We had less than 1 lakh UCCs in Q1 FY'24. It has become 7.9 million as of now. In Q1 FY'24, we had less than 10-15 FPIs with us. Today, we are talking about 330 FPIs. There has been a significant growth in terms of member participation and market participation in this one year.

▸ Prepared remarks (5 blocks)
Good evening, everyone and warm welcome to you all. Thank you for participating in Q1 FY'26 Earnings Call for BSE. My name is Anand Sethuraman, and I will be the host for the call. Today, we are joined by the BSE's leadership team consisting of Mr. Sundararaman Ramamurthy - Managing Director and CEO; Mr. Deepak Goel - Chief Financial Officer; Smt. Kamala K - Chief Regulatory Officer; Mr. Sunil Ramrakhiani - Chief Business Officer; Mr. Subhash Kelkar - Chief Information Officer; Smt. Radha Kirthivasan - Head of Listing and SME; Mr. Vivek Garg - Head of Trading Development. We also have Key Management of BSE subsidiaries, Smt. Vaisshali Babu - MD and CEO, ICCL and Mr. Ashutosh Singh - MD and CEO of BSE Index Services.
Good evening, everybody and a warm welcome to all our esteemed stakeholders for joining the call today to discuss Q1 FY2026 Earnings. The Indian economy demonstrated resilience in an otherwise volatile quarter marked by trade tariff stresses and conflicts in West Asia. Strong balance sheet, political and policy stability, demographic and digitalization opportunities continue to drive Ind ia's growth story. Key high -frequency indicators in the services and manufacturing sectors continue to signal a broad -based growth. The easing on inflation, a favourable monsoon and RBI's unchanged policy repo rate of <strong>5.5%</strong> after three consecutive rate cuts to the tune of 100 basis points during the previous three months could further aid the growth momentum in the economy. Despite a significant sell -off by foreign investors of around Rs. 47,667 crores in July, domestic institutional investors demonstrated remarkable confidence injecting around Rs. 61,000 crores cushioning the market. In fact, DII's have been net buyers in ev ery month in 2025 so far infusing more than Rs. 4 lakh crores in 2025. Systemic investment plan or SIP investments via mutual funds stood at a record Rs. 1.4 lakh crores for the quarter demonstrating confidence of investors in the broader Indian economy and capital markets. Against this backdrop, BSE demonstrated focus and resilience to report its best quarterly financial performance ever with a topline of Rs. 1,045 crores for the first time ever. Our clear strategy, commitment to offering our stakeholders in India and around the world, the choice and opportunity to invest and our resolute focus on our unique service offerings is continuing to produce results. We crossed the landmark of 600 SME listings on our SME platform with July 2025 marking a record -breaking month with 18 new listings raising a total of Rs. 880 crores. This reflects BSE's pivotal role in empowering India's entrepreneurial ecosystem, capital formation and supporting Hon. PM's vision of Viksit Bharat by 2047.
Moreover, this platform, which started in 2012 March has facilitated Indian entrepreneurs to raise Rs. <strong>10,652 crore</strong>s. The last 100 SMEs to list on the exchange have raised an amount of Rs. 4,071 crores contributing to 38% of the total amount raised on this platform so far. Furthermore, we have rebranded our wholly owned subsidiary, Asia Index Private Limited to BSE Index Services Private Limited. This reflects the deep trust, faith and respect the BSE brand inspires globally reinforcing our commitment to driving India's capital markets forward with clarity and ambition. In the Q1FY26, BSE IPF undertook around 1,026 investor awareness programs to promote financial literacy and bring about awareness in securities market for their financial well-being and protect the interests of investors. BSE India has joined hands with market regulator SEBI in its campaign against financial fraud to protect investors. Through SEBI vs SCAM, we aim to empower every investor with the right knowledge and tools to make informed decisions, avoid digital traps and invest securely. BSE also introduced Nivesh Mitra mobile app, a purely educational offering with no investment advice or promotional content. The app allows users to learn how to open a trading or DMAT account, assess their personal risk profile and simulate investments using historical market data. Despite economic fragility impacting equity cash volumes this quarter, our derivatives market has gone from strength to strength. As mentioned earlier, BSE marked its strongest performance in its 150 -year history in Q1FY26 with a historic milestone of over Rs. 1,045 crores in revenue for the quarter on a consolidated basis, an increase of 59% against the previous year. The growth in revenues is led by strong performance in transaction-related income, other operating income, and investment-related income.
I will now share some of the key 'financial numbers' on a consolidated basis for the quarter-ended June 30, 2025, as compared to the corresponding quarter previous year. BSE's operational revenues on a year-on-year basis have grown by 59% to Rs. 958 crores from Rs. 602 crores. Transaction charges, which include equity cash, equity derivatives, mutual fund and clearing house income has increased by 84% to Rs. 737 crores fro m Rs. 400 crores. Treasury income from clearing and settlement has decreased by 27% to Rs. 45 crores from Rs. 62 crores. Other operating income, which includes enhanced data dissemination fees, index services, software charges , etc. has increased by 57% to Rs. 70 crores from Rs. 45 crores. Income from investments increased by 28% to Rs. 79 crores from Rs. 61 crores. Operating expenses increased by 5% to Rs. 359 crores from Rs. 343 crores.
Further, 48% of the total operating expenses are attributable to regulatory fees and clearing and settlement expenses, all of which is directly correlated to increasing derivatives volumes. The operating EBITDA has increased to Rs. 626 crores as compared to Rs. 282 crores with margins expanding to 65% from 47%. BSE's core SGF stood at Rs. 1,144 crores as of July '25 end. During the quarter, there was no additional contribution to core SGF. The net profit attributable to shareholders of the Company stands at Rs. 539 crores, up from Rs. 265 crores, a growth of 104% for Q1 FY'26 against the corresponding quarter previous year.
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