BSE stock plunged 13.31 per cent on the NSE to close at ₹2,783 on Monday’s trade. The stock tanked 17 per cent in early trade after SEBI’s direction on regulatory fee. The regulatory body on Friday directed BSE to pay the regulatory fee on the annual turnover based on the notional value of the options contract, along with differential payment for past years with interest.

As per the stock exchange filing on Monday, the exchange has been evaluating the validity of the claim as per SEBI communication. “In case, if it is ascertained that the said amount is payable, then the total differential SEBI regulatory fees for the past periods i.e. from FY2006-07 to FY2022-23, would be approx. ₹68.64 crore plus GST which includes interest of ₹30.34 crore.

“The due date for payment of SEBI regulatory fee for FY2023-24 is April 30, 2024, the amount payable as per premium (turnover) is approx. ₹1.66 crore plus GST, which has been paid.

“The differential SEBI regulatory fees for the year, if liable, could be around ₹96.30 crore plus GST,” BSE said.

Analysts on the stock

Global brokerage Jefferies has downgraded the stock to ‘hold’ from buy rating and has cut the target price to ₹2,900 from ₹3,000.

Meanwhile, analysts of HDFC Securities have not changed their estimates for the stock and have maintained the ‘buy’ rating.

“We expect a revenue/EPS CAGR of 34/42 per cent over FY24-26E, led by a revival in transaction revenue. We maintain our buy rating and assign a SoTP-based target price of ₹3,100, based on 40x core FY26E PAT + CDSL stake + net cash ex SGF,” they said in an HSIE research report.

The report emphasised that the regulatory fee impact for BSE is amplified because it collects one-third premium for the same notional volume and pricing is 25 per cent lower against NSE.

It pointed out that the shift from premium to notional is a regulatory setback and BSE will have to pay a regulatory fee of ₹1/2.5/3.1 billion, which is 13/21/22 per cent of FY24/25/26E APAT. Another way to offset the impact of higher regulatory fees is to increase the transaction charges by 25 per cent and reduce clearing charges by 10 per cent, which will reduce the impact to only 5/-2 per cent for FY25/26E. The exchanges earn revenue on the premium, which is only 6/19bps of the notional value and the payment of the regulatory fees will be on the notional turnover.