“When you come in, you generally want to increase your revenue and bottom line,” Ramamurthy said ET Markets. “It looked very difficult to increase sales and so I made a cost reduction of ₹100 crore.”The cleanup targeted revenue leakage, including barter programs, and freed up capital to rebuild the organization. Vacancies were filled, pay scales were rationalized, appraisal cycles reinstated and senior leadership reinvigorated.
Equally important was the sharp turn towards customer engagement. In his first three months, Ramamurthy met nearly 350 brokers, asking a single question that he described as “hands folded”: what would make them trade more on BSE.
The feedback shaped BSE’s operational and technology roadmap. Edge systems were renewed, servers replaced and a new data center created. Order processing capacity has been scaled up from 10 crore orders to 1,800 crore gross orders per second, while brokers can now process up to 67,500 transactions per second with a one-second delay.
The goal was to remove technology latency as a competitive handicap and rebuild broker confidence. Also read | Exclusive: BSE eyes new monthly index options, revamps Bankex and takes on Nifty Bank
The turning point of BSE
The real turnaround came in May 2023 with the relaunch of equity derivatives contracts. Till then, BSE did not exist in index options and NSE was the only player. The relaunch marked a deliberate effort to reposition options trading as the exchange’s main growth engine.
Sensex’s weekly options emerged as the flagship product, backed by new contracts like Bankex, frequent recalibration of expiration days and a focus on deepening liquidity post expiration sessions.
In November, BSE’s market share of premium turnover for index options rose to 28.4%, while notional turnover reached 44%, according to Jefferies. A year earlier, these figures were 13.1% and 24.5% respectively.
“BSE’s operating revenues have grown fourfold since FY2023, led by the launch of weekly Sensex options,” said Jefferies, who expects a compound annual growth rate of 28% in operating revenues for FY26-28, driven by rising options market share and expanded co-location capacity.
Financial operating leverage was significant. BSE’s revenue from ₹1,371 crore in FY24 is expected to rise to ₹4,368 crore in FY26, up 218%, while profit after tax is expected to rise 189% to ₹2,229 crore. EBITDA margins, which stood at 28%, are expected to rise to 62%, according to Jefferies.
Institutional ownership tracked performance. Share ownership of mutual funds, which was just 0.3% in FY23, has increased to 10.4%, while ownership by foreign institutional investors has doubled from 8.4% to 16.7%.
Transaction costs now represent almost 60% of operating revenues, after growing eightfold between FY23 and FY25, B&K Securities said, describing the scale-up in equity derivatives over the past 18 months as the result of “impeccable strategic choices”.
Technology investments have gone hand in hand with capacity expansion. BSE has more than doubled its colocation racks in the past year and plans to add another 70 to 90 racks by the end of FY26, bringing its total capacity to about 500 racks. Increased use of these racks is expected to be a key profit driver, Jefferies said.
The turnaround has also benefited from regulatory changes. Ramamurthy credited the regulators for allaying concerns about a level playing field once they were satisfied with BSE’s case.
“The support from regulators has been tremendous,” he said, calling it one of the key factors that enabled the stock market’s revival.
For Ramamurthy, the success of Sensex derivatives is less about overall market share and more about the depth of the ecosystem. “To me, the tracking element is not market share,” he said. “The most important parameters are how many brokers, FIIs and clients trade with me.”
Participation has expanded from 28 brokers on day one to more than 550 today, including 435 foreign portfolio investors.
“In my previous role at NSE, I was in charge of new product launches and I have never in my life seen a new product grow rapidly in such a short time, not only here but also globally,” he added.
The way forward
Real estate agents see further growth opportunities emerging. B&K Securities expects incremental contributions from the co-location business, the clearing corporation and the Star MF platform to support revenues beyond derivatives.
However, sustainability risks remain. As Sensex weekly options scale up to sizes similar to Nifty contracts, Jefferies warned that “Sensex could face similar challenges beyond FY29,” citing historical constraints in average daily turnover for flagship indices.
For the time being, the execution remains the distinguishing feature. With deal-driven revenues accelerating, margins widening and new growth engines emerging, BSE’s revival under Ramamurthy stands out as one of India’s most compelling market turnarounds, rewarding investors who backed the story when it was still far from consensus.
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