BSE to See Revenue Surge on Transaction Fee Hikes for Equity Derivatives

In November 2023, the Indian stock exchange BSE raised transaction charges for trades in the equity derivatives segment. The new transaction fee structure is based on the incremental billable monthly turnover (premium value). The new pricing model is a switch from BSE’s previous flat fee structure and is similar to another Indian stock exchange, the NSE. The revisions apply to S&P BSE Sensex Options. Following the new structuring, analysts expect a surge in BSE’s revenue driven by an uptick in derivatives income, as the company now monetizes its options product.

According to Visible Alpha consensus, with the new pricing structure in place, BSE is expected to generate ₹1.7 billion in transaction revenue from equity derivatives in 2024. Estimated to account for 11% of BSE’s total revenue in 2024, transaction revenue is projected to be a key revenue driver accounting for 30% of BSE’s total revenue in 2025, and 35% by 2026. On the back of the rise in transaction revenues, BSE’s total revenue in 2024 is projected to jump +63% year over year, reaching ₹15.5 billion. Between 2024 and 2026, transaction revenue from equity derivatives is expected to grow at a CAGR of 136%, while BSE’s total revenue is projected to grow at a CAGR of 33%.

Sector: Financials
Industry: Securities exchange
Ticker: BSE_IN