Global index provider FTSE Russell has confirmed that the Bombay Stock Exchange (BSE) has met the necessary criteria to become an eligible exchange for its equity indices. The development paves the way for BSE-listed stocks to be considered for index inclusion, which could potentially attract passive fund flows.
According to the index provider, stocks listed on the BSE's main board will be assessed for index eligibility beginning with FTSE's March 2027 review. Additionally, any stocks listing on the BSE main board through initial public offerings will be eligible for fast-track screening.
The announcement outlines specific guidelines for companies listed on multiple exchanges. If a company is listed on both the BSE and the National Stock Exchange (NSE) and passes liquidity tests on both platforms, the NSE-listed security will be selected for index eligibility. FTSE Russell noted this decision is due to the NSE having higher international institutional investor participation. Stocks listed on the NSE are already eligible for inclusion in FTSE Russell indices.
In related market developments, the NSE announced earlier this month that it would add the BSE to its benchmark Nifty 50 index, effective in September. Analysts at Nuvama estimated that this inclusion could bring in approximately $695 million of inflows for the BSE.
"The recognition of the BSE as an eligible exchange by FTSE Russell is a significant milestone for India's capital markets. Starting with the March 2027 review, this development creates a clear pathway for BSE-listed companies and IPOs to tap into passive global fund flows. Combined with the upcoming inclusion of the BSE in the NSE Nifty 50 index, these structural changes highlight the growing depth and integration of Indian exchanges within the global financial ecosystem. Market participants and upcoming issuers should closely evaluate liquidity and listing strategies to maximize these international opportunities." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
