BSE Indices Expand Beyond Sensex Amid Rebuilding Efforts

BSE Indices Revives as India's Passive Investing Story Gains Momentum

For five years, between 2019 and 2024, while the markets notched consecutive highs aided by the post-pandemic boom, BSE Indices waited on the sidelines. The index provider, in its previous avatar of Asia Index, was mired in a stalemate between S&P Dow Jones Indices and BSE. By the time BSE gained complete control of the firm in 2024, India's passive investing story was well underway, with new investors pouring crores into the markets.

CEO Ashutosh Singh inherited a company that had legacy branding, but a depleted pipeline. BSE Indices' gap was not just in lack of products, but partnerships, sales team, and engagement with the industry. During the five-year hiatus, NSE Indices was the sole index provider, perfectly poised to gain from the soaring demand. Singh had to close the gap, and had to close it fast.

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In less than two years, the firm launched almost 60 indices across strategies, and asset classes. The index provider has launched its factor indices across largecaps, midcaps, and smallcaps, while also introducing long-short and inverse indices which are aimed at more sophisticated strategies. Singh was particularly emphatic about the BSE India Sector Leaders Index, which was a result of finding a gap in the market, decoding its suitability, and building the index.

Another area of focus for the firm has been the insurance sector. There are strict regulatory frameworks, but given the long-term nature of capital flowing in from insurance firms, there is a strong use case for custom benchmarks. The insurance industry has emerged as an important and growing client segment for BSE Indices.

Given the lacklustre returns of the Indian markets over the past 18 months, there has been little interest from global institutions or large-scale international investors, but the attempts are still being made. While BSE Indices launched 59 fresh indices, during the same time, its key competitor NSE Indices released almost 40 indices, centered around a similar suite of offerings: momentum indices, debt indices, thematic indices. NSE Indices also has the benefit of being the only player for a very long time.

Today, the aim of the company remains the same as when it restarted: expand into newer and niche segments to broaden its reach and meet the developing needs of the benchmarking business. However, the key challenge remains on sustained adoption by asset managers and investors, not just in India, but across the globe.

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