BSE vs NSE: Can NSE Repeat BSE’s Massive Growth Story? | CA Rachana Ranade

Now, just in case if you have imagined that the BSE stock might have gone up 50% this year, then 50% next year, and then again 50% every year since 2017 till date, that's not the right way to look at CAGR.

Because CAGR is like an average growth rate, which is compounded over those many number of years.

It's not like every year return.

So if I were to tell you what happened to the stock after listing, here's what I have to show you.

Now I am on a trading view and if you see here this was the first month of listing February 2017.

It hit an all time high at that time which was 133 and after that the stock went a little bit sideways and then kept on going down and down and down.

and it hit a low of 31 rupees during the covid lows slowly steadily it recovered back to its IPO month high and this was when 2021 so you can imagine any person who had invested in BSE in 2017 till 2021 that person had eventually no returns okay now if you check what happened post that the stock started to go up but After a nice round upward, again it retested back to the same level which was the IPO first month listing and this was in March 2023.

Now look at what happened after March 2023.

There was a dream run by BSE.

from march 23 to march 24 have a look at what i mean what was a crazy run-up that the stock saw and i'm sure everyone would be really interested to understand what could be the key reasons for the overall growth for the stock there are multiple reasons i'm going to tell you one by one see the very first one was new leadership and derivatives relaunch Mr. Sundararaman Ramamurthy, he took over as the MD and CEO when in January 2023.

Now, a decision was taken under his leadership that BSE should relaunch Sensex and Bankex derivatives when in May 2023.

If you remember, that was the month where there was a breakout and retest point happened in May 2023.

That was a month when Sensex and Bankex derivatives were going to be relaunched.

What was so special about that? Number one, smaller lot size.

Number two, the expiry day was differentiated as compared to nifty expiry day.

And very important because of the lower lot size, what happened was that the overall contract size for Sensex came around 6 lakh rupees whereas the contract size for Nifty was around 9 lakh rupees because of which the capital requirement for one lot of Sensex was pretty much lower as compared to one lot of Nifty.

Now, did this reduce the capital requirement for traders? Absolutely yes, this gained more popularity for Sensex.

Second one was the expiry day shuffle.

Now, I'm sure everyone knows about this, that right now, Nifty expires on Tuesday and Sensex expires on Thursday.

But when did this change take place? Barely a year ago.

Before that, it was exactly reverse, where Sensex used to expire on Tuesdays and Nifty used to expire on Thursdays.

Now, many experts say that the index that gets thursday as an expiry date gets some advantage and that is what sensex got as an advantage one more very very important point that happened in november 2024 was that every exchange was told that you can have or you can offer only one weekly derivative expiry So if you remember for Nifty, it was a bouquet of derivative expiries.

They had Nifty as a weekly expiry.

They had Bank Nifty as a weekly expiry.

They had Fin Nifty as a weekly expiry.

Now, just in case if you have imagined that the BSE stock might have gone up 50% this year, then 50% next year, and then again 50% every year since 2017 till date, that's not the right way to look at CAGR.

Because CAGR is like an average growth rate, which is compounded over those many number of years.

It's not like every year return.

So if I were to tell you what happened to the stock after listing, here's what I have to show you.

Now I am on a trading view and if you see here this was the first month of listing February 2017.

It hit an all time high at that time which was 133 and after that the stock went a little bit sideways and then kept on going down and down and down.

and it hit a low of 31 rupees during the covid lows slowly steadily it recovered back to its IPO month high and this was when 2021 so you can imagine any person who had invested in BSE in 2017 till 2021 that person had eventually no returns okay now if you check what happened post that the stock started to go up but After a nice round upward, again it retested back to the same level which was the IPO first month listing and this was in March 2023.

Now look at what happened after March 2023.

There was a dream run by BSE.

from march 23 to march 24 have a look at what i mean what was a crazy run-up that the stock saw and i'm sure everyone would be really interested to understand what could be the key reasons for the overall growth for the stock there are multiple reasons i'm going to tell you one by one see the very first one was new leadership and derivatives relaunch Mr. Sundararaman Ramamurthy, he took over as the MD and CEO when in January 2023.

Now, a decision was taken under his leadership that BSE should relaunch Sensex and Bankex derivatives when in May 2023.

If you remember, that was the month where there was a breakout and retest point happened in May 2023.

That was a month when Sensex and Bankex derivatives were going to be relaunched.

What was so special about that? Number one, smaller lot size.

Number two, the expiry day was differentiated as compared to nifty expiry day.

And very important because of the lower lot size, what happened was that the overall contract size for Sensex came around 6 lakh rupees whereas the contract size for Nifty was around 9 lakh rupees because of which the capital requirement for one lot of Sensex was pretty much lower as compared to one lot of Nifty.

Now, did this reduce the capital requirement for traders? Absolutely yes, this gained more popularity for Sensex.

Second one was the expiry day shuffle.

Now, I'm sure everyone knows about this, that right now, Nifty expires on Tuesday and Sensex expires on Thursday.

But when did this change take place? Barely a year ago.

Before that, it was exactly reverse, where Sensex used to expire on Tuesdays and Nifty used to expire on Thursdays.

Now, many experts say that the index that gets thursday as an expiry date gets some advantage and that is what sensex got as an advantage one more very very important point that happened in november 2024 was that every exchange was told that you can have or you can offer only one weekly derivative expiry So if you remember for Nifty, it was a bouquet of derivative expiries.

They had Nifty as a weekly expiry.

They had Bank Nifty as a weekly expiry.

They had Fin Nifty as a weekly expiry.