Three years ago, few would have wagered on Asia's oldest stock exchange pulling off one of the most dramatic turnarounds in India's capital markets. Yet since Sundararaman Ramamurthy took charge as managing director and chief executive officer of BSE in January 2023, the exchange's shares have delivered over 14 times return, minting extraordinary wealth for shareholders.

Strategic Foundation: Cost Optimization and Organizational Restructuring

When Ramamurthy assumed charge, revenue growth was challenging and operational inefficiencies had accumulated over time. Rather than chasing topline expansion immediately, his first focus was on fixing the foundation. "When you come in, you are typically looking to boost your revenue and bottom line," Ramamurthy explained. "Topline increase was looking very difficult and so I did a cost-cutting exercise of ₹100 crore."

The comprehensive clean-up targeted revenue leakages, including barter schemes, and freed up capital to rebuild the organization. The restructuring involved filling vacancies, rationalizing pay scales, restoring appraisal cycles, and re-energizing senior leadership.

Technology Infrastructure and Customer Engagement

Equally critical was a sharp pivot towards customer engagement. In his first three months, Ramamurthy met nearly 350 brokers, asking what he described as a single question posed "with folded hands": what would make them trade more on BSE.

The feedback shaped BSE's operational and technology roadmap comprehensively:

The objective was to remove technology latency as a competitive handicap and rebuild broker confidence in the platform.

The Derivatives Revolution: Sensex Weekly Options

The real inflection came in May 2023 with the relaunch of equity derivative contracts. Until then, BSE was non-existent in index options while NSE dominated the space. The relaunch marked a deliberate push to reposition options trading as the exchange's primary growth engine.

Sensex weekly options emerged as the flagship product, supported by new contracts such as Bankex, frequent recalibration of expiry days, and a focus on deepening liquidity beyond expiry sessions. The results have been remarkable:

Financial Performance and Projections

The financial operating leverage has been significant. According to Jefferies projections, BSE's transformation is reflected in impressive growth metrics:

Jefferies projects a 28% compound annual growth rate in operating revenue over FY26–28, driven by rising option market share and expanded co-location capacity. Transaction charges now account for nearly 60% of operating revenue, after growing eightfold between FY23 and FY25.

Institutional Interest and Infrastructure Expansion

Institutional ownership has followed performance trajectory closely:

Technology investments have accompanied capacity expansion. BSE has more than doubled its co-location racks over the past year and plans to add another 70–90 by the end of FY26, taking total capacity to around 500 racks. Increased utilization of these racks is expected to be a key earnings driver.

Leadership Perspective and Future Outlook

For Ramamurthy, the success of Sensex derivatives extends beyond headline market share to ecosystem depth. "For me, the tracking element is not market share," he explained. "The more important parameters are how many brokers, foreign institutional investors and clients are trading with me."

Ramamurthy credited regulatory support as crucial to the turnaround. "Support from regulators has been immense," he said, calling it one of the key enablers of the exchange's revival.

Brokerages see further growth levers opening up, with expectations of incremental contributions from the co-location business, the clearing corporation, and the Star MF platform to support earnings beyond derivatives. However, sustainability considerations remain as Sensex weekly options scale toward sizes comparable with Nifty contracts.

With transaction-led revenues accelerating, margins expanding, and new growth engines emerging, BSE's resurgence under Ramamurthy stands out as one of India's most compelling market turnarounds, rewarding investors who backed the transformation story.

The BSE Mainboard IPO Index, a key indicator of the initial public offering (IPO) market performance in India, has experienced a notable shift. After two consecutive years of remarkable gains, the index has entered a period of correction, signaling a changing landscape for new listings on the Bombay Stock Exchange.

Performance Overview

The BSE IPO Index has shown the following performance in recent years:

This data reveals a significant cooling off compared to the bullish trends observed in the previous two years.

Market Divergence

Despite the overall decline in the IPO index, the market is showing stark divergence, with some newly listed companies significantly outperforming others. A prime example of this divergence is Ather Energy, which has seen its stock price surge by 135.00% since its listing.

Implications for Investors

The current market scenario presents both challenges and opportunities for investors:

1. Selective Approach: The divergence in performance suggests that investors may need to be more selective in their IPO investments, focusing on company fundamentals and growth prospects rather than riding a broader market trend.

2. Sector-Specific Opportunities: The success of companies like Ather Energy indicates that certain sectors, particularly those aligned with future technologies and sustainability, may continue to attract investor interest despite the overall IPO market cooldown.

3. Valuation Reset: The decline in the IPO index could lead to more realistic valuations for upcoming listings, potentially creating better entry points for long-term investors.

Looking Ahead

While it's too early to determine if this downturn is a temporary correction or the beginning of a longer trend, investors and market participants will likely be closely watching how the IPO market evolves. Factors such as global economic conditions, domestic policy changes, and sector-specific developments may play crucial roles in shaping the trajectory of new listings on the BSE.

As the market adjusts to this new phase, both companies planning to go public and investors looking to participate in IPOs may need to recalibrate their strategies to navigate the changing landscape effectively.