BSE hired NSE's own builder and fought back from a 3% share to a derivatives force

By 2009 the Bombay Stock Exchange, founded in 1875, was losing every segment to the National Stock Exchange, the upstart it had provoked the government into creating. In 2010 BSE held roughly 3% of both equities and derivatives trading. The demutualised exchange's board hired Ashish Kumar Chauhan — a member of the five-person team that had built NSE in 1993 and launched its derivatives segment in 2001.

Chauhan widened and deepened: a Liquidity Enhancement Incentive Programme priced option trades at Rs 50 per Rs 1 crore of premium against NSE's Rs 5,000, costing BSE Rs 95 crore in 2012-13 but lifting its derivatives share from zero to 20%; a Deutsche Borse technology tie-up targeted 500,000 orders per second versus NSE's 160,000; and an S&P Dow Jones alliance rebranded the Sensex for global index licensing. He also opened segments NSE ignored — SME listings, mutual fund distribution and offers-for-sale. By 2013 combined equity-plus-derivatives share reached 16%, up fivefold in six years.

The payoff compounded after Chauhan left for NSE in 2022. In May 2023, under new MD Sundararaman Ramamurthy, BSE relaunched weekly Sensex and Bankex index options; by September 2023 equity-derivatives share hit 7.4% from zero in May, and BSE's stock gained 240% in six months. Three years on, average daily premium turnover in Sensex options had risen from about Rs 2 crore to nearly Rs 33,000 crore, and FY26 net profit reached Rs 1,322 crore against Rs 404 crore in FY25.

Combined equity/derivatives share rose from 3% (2010) to 16% by 2013; Sensex options daily premium hit Rs 33,000 crore by 2026; FY26 net profit Rs 1,322 crore

BSE hired the architect of the rival that was beating it, importing NSE's product and risk-management playbook directly.

Loss-leader pricing (Rs 95 crore spent on LEIP in one year) bought the liquidity an exchange cannot survive without.

Attacking SME listings, mutual funds and offer-for-sale created revenue in segments the dominant NSE ignored.

The May 2023 weekly options relaunch shows the turnaround strategy kept working under Chauhan's successor.

India's options market became the world's largest by contracts, so even a minority share transformed BSE's economics.

A legacy incumbent losing to a tech rival should hire the rival's own architect, then undercut on price and attack segments the leader ignores.

BSE listed on NSE in February 2017 after a Rs 1,240-crore IPO, though the stock traded below its Rs 806 issue price for years. The 2023 derivatives relaunch changed that: the stock rose 240% in six months and Sensex options premium turnover reached Rs 33,000 crore a day by April 2026. Regulator SEBI has since tightened F&O rules over retail losses, a headwind for both exchanges.