BSE Share Crash: Why Jefferies Predicts a 10% Earnings Hit from New RBI Norms! 📉🏚️

The market is reacting sharply today, February 16, 2026, as capital market stocks like BSE, Angel One, and Groww have plummeted up to 10% in early trade. The trigger is a combination of a new Jefferies report and the Reserve Bank of India's (RBI) aggressive crackdown on speculative funding.

While you previously projected a target of 3400–3500+ for BSE, the "Source Code" of the market has just been updated with new regulatory constraints.

1. The Jefferies "10% Earnings Leak"

Jefferies has released a fresh assessment estimating that the latest RBI norms will hit 10-12% of BSE's options turnover.

  • The Math: Because derivatives now form a massive chunk of BSE's revenue (₹784 crore in Q3 FY26), a 10% drop in turnover translates directly to a ~10% hit on the bottom line (EPS).

  • Why the hit? Jefferies believes the new "fully secured" lending model will reduce the "Leverage Budget" for high-frequency trading (HFT) and proprietary desks, which are the primary engines of BSE's options volume.

2. The RBI "Prudential Norms" (The speculative kill-switch)

The RBI's late-Friday circular has introduced a "System Firewall" for brokerages:

  • 100% Collateral Rule: Starting April 1, 2026, all bank loans to stockbrokers must be backed 100% by tangible collateral (Cash, G-Secs, or Property). No more "Partial Guarantees" or promoter backing.

  • Prop-Trading Ban: Banks are now strictly prohibited from financing proprietary trading activities. Since prop-trading firms account for over 50% of equity options turnover on Indian exchanges, this is a massive blow to liquidity.

  • Margin Squeeze: Bank guarantees for exchanges now require 50% collateral, with half of that (25%) required in hard cash.

3. The New Range: 2500 – 3000

You are absolutely right—BSE is entering a "Consolidation Loop." The "Monopoly Logic" is still intact, but the speed of growth has been throttled.

  • Resistance (3000): The previous record high of 3030 now acts as a "Hard Ceiling." Every time the stock approaches 3000, the "Jefferies Earnings Impact" will likely trigger profit booking.

  • Support (2500): This is a strong technical "Floor." Given that BSE still grew its consolidated profit by 174% YoY in Q3, the valuation remains attractive at these levels.

  • The "Wait and Watch" Protocol: The stock is likely to bounce between these two levels until the market sees how much "Alpha" BSE can still produce under the high-tax (STT hike) and high-collateral (RBI norms) regime.

The Personal View

As a developer and algo trader, I view this as a "System Optimization" phase. The RBI and SEBI are essentially "Rate Limiting" the market to prevent a retail crash. While your target of 3500 might take longer to reach, the exchange's business model remains a "Cash Cow."

My Strategy: Don't chase the stock at 2900+. Instead, use this 2500-3000 range to accumulate. The monopoly hasn't ended; it has just been "Regulated." As we saw with the Indo-US Trade Deal and PSU Bank rallies, capital will always find a way to the most efficient "Kernel"—and BSE is still the oldest, most efficient engine in Asia.

Dhaval Visariya

AMFI Registered Distributor (ARN-327925) | Software Developer & Finance Enthusiast

Connect with me:
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Disclaimer: I am an AMFI Registered Mutual Fund Distributor. Views expressed here are for educational purposes. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
📧 Contact: info.apollofinancialservices@gmail.com

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