BSE Shares Slide Over 6% Amid SEBI Action on Jane Street; Brokerages Flag Valuation, Regulatory Risks

Shares of BSE Ltd, Asia's oldest stock exchange, fell sharply on Tuesday, 8 July, declining over 6% in morning trade as investor sentiment remained weak. The stock has come under sustained selling pressure due to ongoing regulatory concerns and questions around its valuation.

The broader capital markets segment also faced notable declines, with stocks like Angel One, CDSL, and 360 ONE WAM dropping by as much as 3.5%, reflecting wider unease in the sector.

BSE Shares After SEBI's Ban on Jane Street

The sharp fall in BSE shares down about 10% in total over recent sessions-follows a regulatory action by the Securities and Exchange Board of India (SEBI) against Jane Street, a U.S.-based proprietary trading firm. SEBI alleged that Jane Street engaged in manipulative trading practices to unfairly profit from index movements.

As a result, the regulator has barred the firm from accessing Indian securities markets. Jane Street had reportedly generated over $2.3 billion in net revenue from equity derivatives trading in India last year, making this a major setback for the company.

BSE Share Price Today

At 11:10 a.m., BSE's share price was trading at Rs 2,536-down 3.8% from its previous close. The broader stock market remained range-bound, with benchmark indices showing little momentum, adding to investor caution in the capital markets space.

Despite the negative sentiment, global brokerage Jefferies sought to ease investor concerns. It noted that the financial impact of Jane Street's exclusion on BSE is likely to be minor. According to Jefferies, BSE is expected to earn around 58% of its FY26 revenue from its derivatives business, but foreign portfolio investors (FPIs) contribute only 3-4% of the total derivatives turnover. Jane Street's contribution is estimated to be a fraction of that-around 1%. Therefore, the brokerage believes the earnings impact would be limited, estimating only a 60-70 basis point hit to BSE's earnings per share (EPS) for FY26.

However, not all brokerages were equally optimistic. ICICI Securities flagged several risks to BSE's outlook, including regulatory restrictions, potential changes in expiry days for derivatives contracts, and concerns over high valuation multiples. It pointed out that BSE's premium average daily turnover (ADTV) declined by 12.4% month-on-month in June, falling to Rs 13,900 crore, after strong gains in April and May.

While ICICI Securities remains broadly positive on BSE's fundamental strengths, it warned that the current share price may already reflect the company's medium-term growth potential. The stock is currently trading at a valuation of over 45 times its estimated core earnings per share for FY27, which the brokerage believes is high-especially in light of potential regulatory headwinds.