FTSE Russell’s decision to recognise the BSE as an eligible exchange for its global equity indices could have limited incremental impact on most large Indian companies, but may prove particularly relevant for the (NSE) as it prepares for its own listing.
Last month, the global financial index provider said securities listed on the main board will become eligible for assessment for its global equity indices from the March 2027 review. Any newly listed securities, which do not immediately qualify, will also be eligible for fast track screening for inclusion in widely tracked international benchmarks.
Securities listed on NSE, however, are already eligible for FTSE Russell’s indices.
“All large-cap stocks listed on NSE are also listed on BSE, so FTSE’s inclusion of BSE-listed stocks makes no difference to any stocks as of now,” said Arun Kejriwal, founder of Kejriwal Securities.
“The material difference would be for NSE’s shares, which are expected to list soon on BSE and could become eligible for inclusion in global indices,” he said.
NSE, the world’s largest derivatives exchange by number of contracts traded, is expected to list its shares on BSE towards the end of the month, after receiving the market regulator’s final approval last Friday.
The public offer is expected to value the country’s largest exchange at around ₹30,000 crore, with strong investor interest already seen in the unlisted space ahead of the issue.
If the listing takes place as planned, the stock would have accumulated around six months of trading history on BSE by the time of FTSE Russell’s March 2027 review. The six-month period would also allow NSE’s shares to meet the minimum listing requirement for consideration for BSE’s flagship indices.
However, index inclusion is not automatic. Securities would still have to meet the respective index provider’s requirements on factors such as size, liquidity and investability. BSE indices, for instance, assess stocks on factors including float-adjusted market capitalisation, traded value and trading frequency over the relevant observation period.
Given the expected interest in NSE’s shares, the stock is expected to build the liquidity needed for such assessments once trading begins. FTSE’s tweak could nevertheless remove one potential exchange-level hurdle for NSE at a time when the exchange is preparing to enter the listed market.
International institutional investors often access large markets through benchmark and passive funds, making inclusion in widely tracked global indices an important potential source of incremental demand for a large stock such as NSE.