← Throughline · holding view Deep analysis ↗ Q4 FY26
BSE BSE Limited · Other Q4 FY26 · concall
Pattern: iccl member additions sgf

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

1 deflection · 4 weak · 6 clean — pushback across 5 of 11 Q&A turns

Focused evidence 5 of 11

Swarnabh Mukherjee · 360 One Capitalweak

On ICCL member additions, how should we think about this and how does it manifest into the core SGF contribution? Also, the other expenses came out slightly higher this quarter - some color and trend going forward?

ICCL has been adding members, both big and small. ICCL has significantly increased its technological capability to handle around 29,000 trades per second per broker, and a peak of 69,000 with some small latency of one second. Therefore, it has attracted some significantly large market participants and also smaller participants as well. The addition of members alone does not directly contribute to the growth or requirement of SGF. SGF is a function of a stress test conducted with the largest market participants and based on multiple factors it evolves. So simple addition of members does not directly correlate with the increase in the SGF requirements. At this point of time, the SGF maintenance by ICCL and BSE are at a very comfortable situation, and it has added strength even more to the balance sheet and situation of ICCL.

Supratim Datta · Jefferiesdeflection

Your option contracts are still quite lower than competition, and recently we saw that competition increased the realization for contract as well. So how are you thinking about pricing going into FY27, given you have a lever to increase pricing there, or if you could reduce the Investor Protection Fund contribution like your competition has also done?

Contributions to IPF and other statutory things are governed by SEBI rules, so there will be no intention to reduce any of them, and we will continue to be supporting all those noble causes stipulated by the regulators in the normal fashion as what we have been doing all along. As far as the cost is concerned, we always believe in charging appropriate amounts at appropriate points of time, considering multiple factors, including the volumes that we are making and the cost of trading and the affordability and what will be easy for the members. So, at this point of time, we have priced, based on our studies, whatever cost we should charge for the options. These are subject to revisions and review, and as and when we feel the appropriate time has come for either an upward or downward revision, we will consider doing it. It will be totally driven by our own estimate and not by any other external factors.

Amit Chandra · HDFC Securitiesweak

On the strong growth on the options side - the share of our monthly contracts has been rising and still is only at 5% to 6%. How do we see this panning out, maybe in the next one or two quarters? And in the incremental volume on the options side, how much is coming from existing vendors and new vendors? Also on the cost side, drop in clearing expenses - despite options revenue going up 113%, expenses down 12-13% on a full year basis. How do we see the clearing expenses panning out?

First is on monthly contracts. The percentage of monthly contracts for us is going up, but that is not the destination where we would like to be. It is our strong belief that the market has to be deeper and broader. One of the ways of achieving it or one of the parameters for us is the greater participation of monthly contracts. Since BSE's derivative segment is fairly new even now, with only three years that have gone, some of the market participants who are well-established in Indian markets are still yet to be present in BSE's market, and we are working with them to bring them in. They are in various stages of implementation. In the coming months and years, we feel that more and more such participants who have a long-term view on the market will be participating even in a bigger way with Sensex contracts, which will bring in the type of monthly volumes which we are looking forward. One of the recent contracts introduced Bankex, is showing some traction in respect of monthly contracts. Honestly, I do not know how much volume is coming from new people and how much is coming from existing people, because we do not measure it as participant-wise to see, because that is not a fair way of looking at the markets. In the last one year, the member count has increased from 446 to 587. FPIs have increased from 100 to 520. Colo-racks have increased from 300 to 500. Monthly contract volumes have gone up by 5x. Index futures have gone up by 3x. As far as clearing expenses are concerned, the SEBI turnover fee is based on the notional trading, the clearing expense is based on the number of contracts, and we earn revenue based on premium. In times of volatility, when the premium is higher, naturally, because volatility being one of the factors for pricing an option and, therefore, the premium, you get more premium, but the contract is only one, so the clearing expense comes down and the premium and, therefore, the revenue goes up. Whether we can predict this trend, it is, of course, not predictable. The correlation between the clearing and settlement expenses versus the premium cannot be predicted. The contract size has doubled over the last week.

Deepak Ajmera · IGE Indiaweak

Other than equity, like electricity derivative and commodity derivative, similarly any innovative thought there?

Indeed, BSE's stipulated strategy is to explore commodity derivatives as early as possible. BSE was not able to have any opening in equity derivatives with a very poor volume in equities for a very long time. And just in the last three years, our entire attention span has been totally gobbled up by bringing in level playing field to whatever extent we can through regulatory requests and advocacies and bringing in a new segment and build volumes. So, we were concentrating on that by and large. Now that we feel that we have made some headway, though there is a long way to go further, we will be starting to think on commodity derivatives. We do not want to have the sense of being left out and therefore me too type of a syndrome where we also start something because others are starting it. We want to create a value proposition for the market by thinking about some unique selling proposition, just not the expiry day alone as a differentiator. Do we have anything immediately on our mind and on the cost to implement? No. But some thought processes are wrong, and our sincere wish is that very soon we should be able to come out with consolidated views, taking up with the regulators and taking the commodity agenda forward.

Madhukar Ladha · JP Morganweak

On participants on BSE derivatives platform - are there any brokers who are still yet to get impanelled on the derivatives platform, on the institutional side? Also, in terms of large HFTs, NSE was always ahead of BSE. Is that gap closing? What is the runway still available? How many more HFTs and how much additional volumes could come onto BSE?

Our goal in derivatives is deepening and broadening of markets. At this point of time, we have around 587 brokers of India who are with us and who are trading SENSEX options. In terms of brokers, while our stated goal for this year is we should go at least 600, 700. 600 appears to have been achieved by now already. So, at least 700 is what is the goal. Will this add greater runway in terms of volume? I don't think so because these are all small members. Then, why are we wanting to increase more members? We feel it is not big or small that matters. It is deepening and broadening that matters. With regard to HFTs, some of the HFTs are FPIs. Our FPA count has grown from 100 to 520, which is commendable. But we have put for ourselves a target of around 800 FPAs. The reason why we are putting this number is there are quite a few HFTs or quite a few funds who typically look into long-term option products because that is their strategy. Some of them are slowly walking in because, till very recently, the liquidity for us in monthly contracts were lesser. Today, with a lot of efforts, we are finding that it is meaningfully liquid. So, more and more people are coming in. So, we feel that the runway is more there in that place. In terms of the big unknown HFTs, most of them are already there. It is these types of bigger funds who get into longer-term situation we are looking in for. If I were to put a forward-looking number, sorry, I will not be able to put any forward-looking number in terms of volumes or market share because that is not where we are strategizing and putting our targets. Our targets for ourselves as KRAs and for our employees is on how many members are there, how many FPIs, how much of COLO utilization, how much of monthly contracts building up, what is the percentage of contribution of FPIs to the total volumes of ours, not to anybody else. We are already at around 5% to 6%. While in the market, generally, we find the participation is around 9%. So, that is a target for us to go to around 9% of FPI participation.

▸ Other Q&A (6)
Swarnabh Mukherjee · 360 One Capital

Some forward-looking view on SGF could be very helpful - if you see some kind of contribution, color would be better.

We are not able to project what will be the future SGF, because it is based on a complex set of parameters. We had initially decided that as BSE, in order to prevent any sudden jerks in the P&L, we will voluntarily contribute a specified stipulated percentage of our profits into SGF every quarter, and we put a threshold of maximum up to which we will contribute. That is, if you are reaching more than, say, 150% of the total required amount of SGF by this consistent contribution, we will review the percentage of contribution, which was at the point of time set as 5% of profits. At this point of time when we review, we have already touched the threshold of more than 150 crores. We have crossed it, and in that situation, we are reducing the contribution requirement per quarter from 5% to 3.5%. Other than that, a forward-looking number cannot be put.

Swarnabh Mukherjee · 360 One Capital

If you could comment on the other expenses part also.

Our group's clearing company, ICCL, provides services to both BSE and NSE. There is an outstanding of Rs. 80 crore, which is an old outstanding from NSE. So, we have taken some ECL provision that is in line with our ECL policy and accounting standard requirement, which has led to this increase in the current quarter.

Yash Parekh · Individual Investor

In the transaction charges income, there are two heads, one is special rate income, and another is a normal rate income. So, wanted to understand the difference between the two. And year on year, special rate income has somewhat reduced.

The special one is for exclusive stocks. And the first one is, the other one is for commonly traded stocks across bourses. We have been conducting a lot of investor programs where we are telling people that in times of volatility, large cap equity stocks generally are a safer bet for new investors. As more and more new investors are coming into the market as markets are becoming more democratic with good amount of access and democratic access to the news as well. When new investors come, we feel that because of all the good investor protection measures and investor awareness creation that we along with the regulators are doing, they are more migrating towards the commonly traded large cap or slot of mid-cap stocks. Therefore, that income is going compared to the income on the other side. As you know, stock trading is a question of market preference. Our insights will be limited to whatever extent of analysis we are able to see without getting into the privacy of a client. So, when we look at it from the economic parameters, this is what we are able to confirm.

Satyam Chaurasiya · Individual Investor

How do you look at MSE as an emerging competitor? And what is your current market share in the cash segment?

Actually, just a small correction. This is the 13th consecutive quarter where BSE has seen new heights. I joined in January and by the end of March, that's the first quarter that started. So, 13th consecutive quarter. As far as any specific exchange which you are naming as a competitor, our stand has always been we should be the competitor with ourselves. All the other participants are trying to help in the capital market expansion of the country. Given the size of the Indian markets and given the size of the investor population that is available, I feel that the number of exchanges can be whatever it is and they can cater to the society by creating niche products for themselves. That's how we look at the MSE part of it. Market share in equities has been hovering around 7% to 8% compared to 5% to 6% when I joined. This is far away from what we wanted it to be. We wanted it to be at least double digit. With a lot of great efforts, we brought in common contract notes. We thought with that there will be and also the closing auction, what we thought was both institutional and retail participants will become exchange agnostic and trade where the prices are suitable for them. But unfortunately, what we are understanding is the applications of SOR (Smart Order Routing) which people send to both the exchanges while we have cleared are still pending for more than six months at the other exchange because of which smart order routing has not taken off and because of which the clients are not able to be exchange agnostic and take the best prices available at BSE. This has probably impeded the growth in the market share and contribution of BSE to the generation of capital and economic development of India.

Devesh Agarwal · IIFL Capital

If you see the premium to notional ratio for Sensex and when you compare to the other large index, there is a gap that is there. And it has been eight months that we have to Thursday. So, there is some expectation that this gap could get converged as the non-expiry volumes go up. What can be done to converge this premium to notional ratios? And can that happen?

Yes, indeed, you are right. The premium to notional ratio of Sensex vis-a-vis comparable indices in the market, the ratio at Sensex is lower. This is mainly because still the monthly contracts are yet to develop and grow in a big way at BSE. From a situation where that ratio used to be very, very small because most of the volumes were mainly only on the expiry day, the situation I am talking when we had Friday as expiry. Compared to that today, the concentration of volumes on the expiry day has significantly fallen down and it has gotten distributed. But still, if you talk about monthly volumes, maximum what we trade is the one-month volumes. We do not have openings in second month and third ahead. Can it be closed? Yes, that is exactly what we are working in for. We are working on such types of participants who are having strategies in trading longer-term contracts. What I would like to emphasize, which is of course very well known to you, is Sensex is just a three-year-old product, whereas the other comparable products are 26-year-old in the market. So, it is just that Sensex has been fortunate with the support of all the market participants and people like you, has grown so big in three years. Typically, product growth takes a lot of time. While the time has been crunched a lot for Sensex, still there will be some more time required for the longer-term contracts should develop and sustain.

Rushabh Doshi · Nirmiti Investment Advisors

On returning wealth to shareholders in terms of dividend and buyback - if you refer to slide 30 of your deck, initially till 2023, the payout ratio has been close to 99%. And over the last two years, it has fallen. Now, it is currently around 28%. This business does not require a lot of cash, apart from the capex. Although it has been going up year-on-year, it is still not close to the amount of free cash flow surplus which the company has. Compared to other exchanges like IEX or NSE, the payout ratio is much lower. What could be the reasons that you are holding on to excess cash on the balance sheet? You might be just generating 4%-4.5% post-tax returns on the excess cash.

A 100% dividend payout or a significantly large payout may indicate a situation where the company is not having any growth idea at all. If you look at BSE the points of what you're talking about as 97%, 98% payout, BSE never had any growth prospects in its mind. While in terms of percentage, it looks so big, what was the amount paid also, we should see. The entire amount generated was paid back because there was, apparently it did not have any growth targets in its mind. The things are different now. If you look at the share price growth, that is also one way of returning money to the shareholders. It is just not dividend and the buyback, which are ways of returning back. When I tried to buy back the shares, most of the investors were so supportive of BSE, they didn't want to even offer one share for buyback. The market capitalization of BSE was 5,000 crores when I joined. And today we are talking about a market capitalization of around 1.56 lakh crores. We are talking about a dividend that what we paid last year was around Rs. 23 per share of that Rs. 5 for the 150th year. The remaining Rs. 18, if we look at it in current share scenario, because there was a 1:2 bonus, which is again a way of returning capital to the investors to make it more liquid by giving more shares in the market. Today, that will translate to Rs. 6 per share, as Rs. 6 per share as dividend. Today, as against Rs. 6 per share, we are giving a Rs. 10 dividend, which is around 66% more than what we paid last year. If you look at the total outgo, compared to around Rs. 230 crores plus in the last year, without considering the extra dividend of Rs. 5, we are paying around Rs. 414 crores or something this year, which is again a 67% increase. In the last two years, we have built around Rs. 500 crores as gross block, which has gone for capacity increase. BSE is a rapidly growing company, which requires a lot of technology investment. The current year's technology budget already appears to be underpriced. We put around Rs. 300 crores, but with the global situation today, for the memory increase, the price of the memory increasing, the price of hardware increasing, this is almost going to be doubling as an investment requirement for keeping the lights on and growing further to achieve all the ambitious targets that we have in place. We have also invested in technology in a big way, not only with BSE, but also with all the sister companies to provide seamless service. A stronger balance sheet of an exchange is very essential to showcase to the world that the clearing corporation is strong enough. We have been increasing our capacity in terms of COLO, which requires a lot of outlay. And also, there are already efforts on to see whether we should acquire a plot of land in the heart of Mumbai, whereby the ambitious dreams of expanding BSE further can materialize. So, the money is not earning 4.5% and lying idle. It is earning much more than that even in terms of treasury, which is very much available in the balance sheet and profit and loss for you to see. But also, it is being put on to productive use for further enhancing the shareholder value. As the market truly reflects the growth in share price, all the things that we are talking about, and as I would repeat, a 5,000 crores market capitalization in three and a quarter year has become 1.56 lakh crores.

▸ Prepared remarks (5 blocks)
Thank you so much, Rutuja. Good evening, everyone. Welcome to BSE's Q4 and FY 2026 earnings call. Joining us today is our leadership team, including our MD and CEO, Mr. Sundararaman Ramamurthy, Mr. Deepak Goel - CFO, Smt. Kamala K - Chief Regulatory Officer, Mr. Sunil Ramrakhiani - Chief Business Officer, Dr. Vivek Jain - Chief of Staff and HR Strategy, MD and CEO of our subsidiary companies of ICCL and BSE Index Services Pvt. Ltd., Smt. Vaisshali Babu and Ashutosh Singh, respectively. We also have other members of our finance, business, investor relations and secretarial teams present here. Our latest results and investor presentation are now available on the BSE website. We will start with remarks from our MD and CEO on our performance, followed by a Q&A session.
Good evening, everyone, and thank you for joining us today. Let me begin by welcoming our shareholders, analysts, investors, members and all other stakeholders on this call. FY26 has been a landmark year for BSE in many ways. This year marked my third full year as MD and CEO of BSE, and it is particularly gratifying to share that FY2026 was a record year of achievements for the BSE, marked by important strategic milestones, new listings and trading records, along with the celebration of BSE's 150th anniversary. I am happy to state that in FY2026, BSE's total revenues crossed Rs. <strong>5,000 crore</strong>s for the first time ever in its 150-year history to reach Rs. 5,148 crores. Our record financial performance reflected the continued resilience and strength of our business, reinforcing our competitiveness, relevance and leadership at the heart of the global financial community. We are confident that our focused strategy, together with a series of pivotal initiatives we accomplished or initiated during the year, will underpin our continued success and shape the future financial landscape of India and beyond. Let me first talk a little bit about the macroeconomic environment. The global macroeconomic backdrop over the past year and especially in the last quarter has been challenging and complex. Markets across the world have had to contend with heightened geopolitical tensions, ongoing conflicts, uncertain interest rate trajectories, commodity price volatility and shifting global capital flows. Against this backdrop, India's performance stands out for its resilience and balance. Moving to Indian capital markets, one of the defining features of FY26 was that despite periods of global uncertainty and geopolitical turbulence in the year, foreign portfolios turned episodic and selective. However, this was more than offset by the strength of domestic institutional participation. Domestic institutional investors, including mutual funds, insurance companies, banks and other long-term pools of capital, deployed close to Rs. 8.5 lakh crores during FY26, representing a sharp step-up over previous years. Equally encouraging has been the continued commitment of India's retail investors, whose SIP flows reached a record Rs. 3.5 lakh crores for the year. This reflects the deepening culture of disciplined long-term investment across the country. Against this backdrop, I am pleased to share that BSE delivered its 13th consecutive quarter of record revenues. For the quarter ending March 2026, consolidated revenues stood at Rs. 1,630 crores, surpassing the previous quarter's record of Rs. 1,334 crores, a growth of 22%. On a full-year basis, FY26 revenues reached Rs. 5,148 crores, as compared to Rs. 3,236 crores in FY25, translating into a year-on-year growth of 59%. This makes FY26 the best financial year in BSE's 150-year history till now, underscoring the durability and breadth of our strategy. Let me now highlight a few of the many business milestones in FY26. FY26 marked an exceptional year for main board fundraising and reflected strong issuer and investor confidence. The BSE IPO market was ranked first globally for IPO listings in FY2026, welcoming 255 new listings across main board and SME markets and raising a total of Rs. 1.8 lakh crores. This represents a continuation of the strong momentum seen in recent years, but FY26 stands out as the highest ever, both in terms of number of issues and funds mobilized. As we enter FY27, the IPO pipeline remains robust, with more than 250 active applications to raise Rs. 1.75 lakh crores, reinforcing our position as a leading global fundraising venue. Overall, business fundraising platforms remain the preferred choice by Indian companies to raise capital by enabling issues to raise Rs. 26.9 lakh crores in FY26 by means of equity, debt, bonds, commercial papers, REITs, INVITs, and municipal bonds.
The total number of investor accounts registered on BSE has now crossed <strong>25 crore</strong>s, reflecting the continued deepening of retail participation across the country. Over the past year alone, BSE has added 3.53 crores new investor accounts, with 10 states each contributing more than 1 crore registered investors. On the investor education front, BSE conducted 16,663 investor awareness programs, covering over 8.5 lakh investors in FY26. Moving to our trading segment, new records were set across our cash and derivatives market in FY26 on account of our product offerings, growing client and platform adoption. While cash market volumes remained at long-term normalized levels throughout the year, FY26 marked a milestone with BSE recording its highest ever ADTV of Rs. 7,950 crores. The BSE index derivatives segment continued to demonstrate strong momentum in FY26, with average daily premium turnover reaching a record of Rs. 19,523 crores compared to Rs. 8,978 crores in FY25, translating into a robust year-on-year growth of approximately 118%. Following the transition to a Thursday expiry cycle, we have seen broadening of the liquidity profile, including build-up in non-expiry day volumes and open interest. Our flagship Sensex index options ranks among the most actively traded contracts globally. On the new products front, BSE has received approvals for three new monthly index derivatives - BSE Focused IT, Focused MidCap, and Sensex Next 30. Based on market feedback, derivatives on the BSE Focused IT Index will be launched from 11 May 2026, further expanding and strengthening our monthly derivatives suite. Co-location remains a strategically important part of our diversification agenda. For FY26, co-location revenues increased to Rs. 171 crores compared to Rs. 74 crores in FY25, reflecting strong growth, healthy utilization levels and the continued benefit of the revised Throttle Charges Framework introduced in July 2025. Turning to our mutual fund distribution business, BSE StAR MF continues to serve as a strategically important pillar of our market infrastructure ecosystem. In FY26, the platform delivered yet another period of record performance with revenues increasing 24% year-on-year to Rs. 285 crores. Total transactions recorded on the platform grew to 84 crores, a 27% increase. Notably, the platform achieved a new monthly peak of 8.2 crores transactions in March 2026. In a landmark achievement of financial inclusion, BSE became the first Indian exchange to sign a MOU with the Department of Post (DoP), Government of India. We have successfully onboarded the DOP as a member on our BSE StAR MF platform in January 2026. I am happy to update that the StAR MF has become the first platform to go live for Dak Sevaks who have executed over 1,500 transactions till date. Expanding our platform's reach, BSE Technologies launched StAR NPS on April 22, 2026. This platform aims to simplify and streamline retirement planning for millions of Indians by providing a unified architecture for the national pension system. With StAR NPS, we now capture the entire financial lifecycle of the Indian investor, from their first SIP to their final pension. Our key subsidiaries, such as the Indian Clearing Corporation Limited, ICCL, and BSE Index Services, continue to scale through new client acquisition, product innovation, and enhanced technology adoption. While these businesses remain relatively smaller in size, they have grown at a significantly faster pace over the past three years, with ICCL's revenues having more than doubled, while BSE Index Services revenues have increased nearly fourfold. At BSE, we are confident that our efforts and investments in recent years will ensure our business remains competitive in this global landscape. Thank you all for your continued trust and support.
I am happy to state that in FY2026, BSE's total revenues crossed Rs. <strong>5,000 crore</strong>s for the first time ever in its 150-year history to reach Rs. 5,148 crores. For the quarter ending March 2026, consolidated revenues stood at Rs. 1,630 crores, surpassing the previous quarter's record of Rs. 1,334 crores, a growth of 22%. On a full-year basis, FY26 revenues reached Rs. 5,148 crores, as compared to Rs. 3,236 crores in FY25, translating into a year-on-year growth of 59%. Operational revenues have grown by 63% to Rs. 4,834 crores from Rs. 2,957 crores. Transaction charges comprising revenues from the equity cash, equity derivatives, mutual fund and clearing house segments have registered a substantial increase of 87%, rising to Rs. 3,795 crores from Rs. 2,030 crores, reflecting robust growth in core trading and settlement-related activities. Other operating income, which includes enhanced data dissemination fees, co-location, index services, etc., has increased by 59% to Rs. 349 crores from Rs. 220 crores. Operating expenses increased by 20% to Rs. 1,755 crores from Rs. 1,458 crores. It may be noted that 53% of the total operating expenses are attributable to regulatory fees and clearing and settlement expenses, all of which is directly correlated to increasing transaction volumes. The operating EBITDA, including contribution to core SGF, has more than doubled to Rs. 3,079 crores as compared to Rs.
<strong>1,500 crore</strong>s, with margins expanding to 64% from 51%. The net profit attributable to the shareholders of the company has demonstrated a significant acceleration to reach Rs. 2,497 crores from Rs. 1,326 crores, representing a robust year-on-year growth of 88%. The profit margins have expanded to 49% from 41%. The Board of Directors of BSE Ltd. has recommended a dividend of Rs. 10 per equity share, having face value of Rs. 2, for the financial year 2026, subject to the approval of shareholders in the ensuing Annual General Meeting. The total payout for the year would be Rs. 412 crores, which is an increase of 30% from last year on an overall basis, and 67% excluding the special dividend that was announced on account of 150 years of BSE last year. For FY26, co-location revenues increased to Rs. 171 crores compared to Rs. 74 crores in FY25. BSE StAR MF revenues increased 24% year-on-year to Rs. 285 crores. Total transactions on StAR MF grew to 84 crores, a 27% increase. ADTV of Rs. 7,950 crores in FY26. Index derivatives ADPT reached Rs. 19,523 crores compared to Rs. 8,978 crores in FY25 (118% growth).
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