Shares of BSE dipped 4.4 per cent to end at ₹2,872 after the stock was placed under the additional surveillance measure (ASM) framework by NSE, triggering investor caution.

Unusual price movements and high volumes were some of the parameters that were taken into account while placing the scrip in ASM. According to the NSE, where BSE’s shares are traded, the scrip PE has been higher than 50 for the previous four trailing quarters.

The ASM framework is a regulatory tool used by stock exchanges to monitor and control excessive volatility or abnormal price movements. Stocks added to the ASM list are subjected to enhanced scrutiny and trading restrictions, such as higher margin requirements and limits on intra-day trading, to safeguard investors and maintain market integrity.

BSE shares have risen by about 32 per cent last month and 58 per cent over six month. Last year, share price of the exchange had rallied 226 per cent.

Price fluctuations

Currently, the Price-to-Earnings (P/E) ratio of BSE is 98 times. This means that the market price of BSE shares is 98 times the company’s earnings per share.

Under ASM Stage 1, a 5 per cent circuit filter is applied to limit price fluctuations. This restricts the stock price from moving up or down by a maximum of 5 per cent in day. Moreover, investors have to set aside 100 per cent margin to trade in this stock. The combination of factors are aimed to stabilise stock prices and discourage excessive speculation and volatility.

In all, NSE has 79 companies under long term ASM list and 74 companies in the short term ASM. As an exchange, BSE itself has 215 companies under long term ASM and 99 companies in short term ASM list.

Dharan Shah, Founder, Tradonomy.AI, a research driven AI powered investment platform, said BSE fall post-ASM inclusion reflects concerns over possible price manipulation, now being addressed through regulatory checks.

Stocks under ASM cannot be pledged and all trades have to result in delivery while leverage positions are also not allowed. This ensures that intra-day speculations and buy-today-sell-tomorrow strategies are also blocked, he added.

Undue volatility

“The decline in stock price suggests some froth was likely fuelled by momentum trades that are now restricted. While F&O trading remains open, investors should tread carefully. The ASM framework is designed to stabilise prices and safeguard retail participants from undue volatility and speculative activity,” he said.

The recent rally in BSE stock price comes on the back of the exchange reporting over four times jump in its net profit at ₹493 crore in the March quarter against ₹106 crore logged in same period last year.

The exchange’s revenue from core operations jumped 75 per cent to ₹847 crore (₹484 crore) in the quarter under review. Last month, the exchange announced a dividend of ₹23 per share.

Published on June 11, 2025