As NSE announces transaction charges cut, analyst says BSE product pricing to remain unaffected

BSE was in focus on March 13, a day after NSE's board approved a reduction in overall transaction charges across the cash equity and equity derivatives segments by 1%.

Following the development, global brokerage Jefferies has given BSE a buy call and set the target price at ₹3000 as it expects BSE's product pricing and plans for monetisation of new products to be unaffected due to the NSE move.

For BSE, the analyst said it continues to expect a more than 2.5 times jump in earnings over FY24-26.

Meanwhile, NSE's board’s approval for the reduction in overall transaction charges across the cash equity and equity derivatives segments, Jefferies sees as part of a periodic exercise by the exchange. It said the cut is in a smaller quantum this time compared to FY17 and FY23, which signifies limited appetite for exchanges to engage in price wars currently.

The reduction in charges will be effective from April 1, 2024.

NSE said that the reduction is likely to have an overall revenue impact of ₹130 crore per annum on the company's transaction charges.

In March last year, NSE had decided to roll back the 6% increase in transaction charges in the equity cash and derivatives segment.

NSE had raised these charges by 6% in January 2023 partly to augment the investor protector trust fund corpus due to broker defaults at that point of time.

A day after the announcement, BSE shares were trading almost 2% lower at ₹2,105.95 at 1:35 pm.