On May 23, when the stock started trading ex-bonus for its 2:1 bonus issue, BSE shares dropped 65% to Rs 2,395 each. This indicates that investors were not eligible for the bonus until May 22 and that today is the first day that the shares are trading without the value of the upcoming bonus shares.
Bonus shares will be distributed in a 2:1 ratio to shareholders who were listed on May 22, 2025. That means that they will receive two free fully paid up equity shares of Rs 2 each for each equity share they currently own.
The T+1 settlement system, which is used in Indian equity markets, controls this timeline. Trades are settled one working day following the date of the transaction. Investors had to buy BSE shares by May 22 in order for the trade to be settled and appear in their demat accounts by May 23 in order to be eligible for the bonus shares.
In order to turn their free reserves into share capital, companies typically issue bonus shares. In addition to lowering reserves, this helps increase the number of outstanding shares, which typically lowers earnings per share (EPS) and increases paid-up capital. These bonus shares are also known as free shares because they are given to shareholders at no additional expense.
In addition to the ex-bonus adjustment, BSE stock also faced selling pressure due to reports that SEBI is reviewing NSE’s proposal to shift the weekly index options expiry day to Tuesday.
Goldman Sachs, a global brokerage firm, responded to this development by maintaining a ‘Neutral’ rating on the BSE and setting a price target of Rs 5,340.
The investment bank Goldman Sachs estimates that the BSE’s market share in index options premiums can decrease by approximately 3 to 4 percentage points, or 15%, if this proposed change is accepted. According to year-to-date trends, this would reduce its share from the current 22.2 percent to 18.8 percent.
Additionally, according to the brokerage, Tuesdays have accounted for 24 percent of index options premiums in India thus far this year, which is much higher than the 16 to 19 percent recorded on other weekdays.