Asia’s oldest exchange BSE has witnessed a fivefold jump in onboarding foreign investors in a single year amid the growing popularity of its Sensex options, the bourse’s MD and chief executive officer S. Ramamurthy said during an investor call on Thursday.
“Our active FPI count grew to 520 from 100 over just the past fiscal year, which is a commendable feat,” Ramamurthy said after the bourse declared its thirteenth straight quarter of record earnings. “Quite a few of these funds look into (trading) longer-term option trading strategies, which will deepen the market and increase the Sensex options’ premium to notional turnover ratio.”
“The weekly contract has enough participation; we see runaway (for the FPIs) in the month ahead (near), second (mid) and third (far) monthly contracts,” he added.
Volume strategy
Premium turnover in options refers to the actual traded value, while notional turnover reflects the total contract value. Premium turnover is typically a fraction of notional turnover. An active participant is a registered entity that trades at least once a year.
Currently, Sensex weekly options account for a significant share of BSE’s equity options turnover, which stood at ₹48.2 trillion in premium terms in FY26, according to data from the Securities and Exchange Board of India (Sebi).
BSE’s market share in equity options—comprising index and stock options—rose to 25.3% in FY26 from 12.6% at the end of FY25. The remainder is held by market leader NSE.
The strategy now is to boost volumes in longer-dated monthly contracts—near, mid and far-month tenors—to further expand market share.
Hedging demand
Many FPIs tend to use longer-dated options to hedge their cash market portfolios. A higher FPI count will deepen the BSE derivatives market, Ramamurthy said.
The surge in FPI registrations has coincided with an increase in brokers registered with BSE to 557 in FY26 from 446 in the previous fiscal. Ramamurthy said that, alongside the FPI target, the exchange aims to onboard up to 700 brokers to broaden market participation.
Market share shift
The growing FPI base is reflected in their rising share of equity derivatives turnover. FPIs accounted for 3.22% of BSE’s equity derivatives turnover in FY26, up from 1.95% a year earlier, according to Sebi data.
In comparison, FPIs contributed 6.96% to NSE’s equity derivatives turnover in FY26.
Ramamurthy, who took charge of BSE in January 2023, has overseen a sharp re-rating in the exchange’s valuation. Under his leadership, BSE’s market capitalization has climbed to ₹1.56 trillion from around ₹5,000 crore when he took over.
The BSE reported a 61% year on year jump in its ₹797.3 crore”>net profit at ₹797.3 crore on total revenues of ₹1,630 crore in the March 2026 quarter, driven by a surge in transaction fees on the back of higher trading volumes.
BSE is launching newer indices to deepen markets with BSE IT Focused, BSE Midcap, and BSE Sensex Next 30 indices on the anvil.
