NSE & BSE Face Profit Risk From SEBI's New Ownership Structure

National Stock Exchange(NSE) and Bombay Stock Exchange(BSE) may face the risk of declining profits as market regulator SEBI came up with a new proposal changing their ownership structure.

What is SEBI Doing?

The Securities & Exchange Board of India (SEBI) is seeking public opinion on a suggestion. This suggestion is about clearing shops to diversify their ownership and become independent self-sufficient public utilities.

This is being done with the purpose of strengthening & stabilizing the market structure, according to the discussion published on the website.

What is SEBI's Proposal?

SEBI proposed the two bourses to either:

A) Sell 100% of their holding or

B) Initially sell 49% of their holding to their current shareholders, which would make their current ownership 15%.

SEBI prefers option A.

How does this proposal affect BSE & NSE?

From April to September 24, NSE got a 17% profit from its clearing firm called NSE Clearing Limited. BSE's clearing firm, Indian Clearing Corp. accounted for 19% of its Profit.

With SEBI's new proposal, this profit will take a direct hit as they will lose ownership. Moreover, SEBI has put stricter derivatives trading rules which directly impact the revenue of these two bourses.

The changes would affect the bourses’ margins at the product level, Jefferies Financial Group Inc. analysts Jayant Kharote and Prakhar Sharma wrote in a note.

NSE or BSE which is better?

NSE and BSE, while sharing the common goal of easing trading and investment, have different characteristics that shape their operations and market dynamics. From ownership and governance to market structure and performance, each exchange offers unique opportunities and challenges for you. By understanding these core differences, you can make informed decisions and guide yourself through India’s financial market with greater confidence.

Certainly, NSE pre-IPO stock is the best bet for you if you wish to put your money into stock investment as a retail investor. NSE is dominating with more than 90% market share in all categories. Compared to BSE, its revenue growth has been three times more than BSE for the last four years.

NSE IPO is in the talks as SEBI looks forward to giving a green flag in 2024. based on the above data and the comparison, if you buy NSE unlisted shares, count on Stockify. We are one of India’s trusted online stock trading platforms where you can buy and sell unlisted shares in India from the comfort of your home. Connect with our team to know more.