# BSE shares fall 3% after second downgrade in two days Nuvama cuts BSE to 'Hold' citing CAS impact and other risks as key concerns - **Source:** [Economic Times](https://brifing.si/source/37791137-c35a-4ffe-b6a9-fe103afc9e48) - **Published:** 2026-08-18 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/edd1d1a2-2efd-4f3e-b386-0677f7ac7c30 ## Sharp decline in BSE shares Bombay Stock Exchange (BSE) shares dropped 3% following Nuvama's second rating downgrade in two days. This marks the second downgrade for the stock within a short span, after Jefferies' similar move earlier. Analysts note the reduction to 'Hold' status has shaken investor confidence, creating selling pressure in the market. ## Nuvama's three key concerns Nuvama highlighted three major risk factors when downgrading BSE: the impact of CAS on trading volumes, tighter bank guarantee norms, and limited potential for market share gains. The Court Approved Scheme (CAS) process, which slows down certain transactions, is seen as particularly detrimental to market liquidity and operational efficiency. ## Jefferies' earlier warning Prior to Nuvama, Jefferies had already downgraded BSE shares, cautioning investors about weakening earnings prospects. Their analysts predicted increasing competitive pressures in the sector could drive prices lower. The consecutive actions by two major institutions have significantly influenced market sentiment toward the exchange. ## Impact of CAS on markets The Court Approved Scheme process has emerged as a key factor depressing BSE's trading volumes. CAS involves placing certain companies under bankruptcy protection and suspending their trading. Market experts warn this process might continue affecting operations through the next quarter, potentially limiting revenue growth. ## Changes in bank guarantee norms Another concern raised by Nuvama involves the Reserve Bank of India's stricter bank guarantee requirements. The new regulations mandate higher capital adequacy ratios for exchange members, which translates to additional costs particularly for smaller brokerage firms. This could indirectly pressure BSE's member base and trading activity. ## Market share limitations Analysts observe BSE's national market share has plateaued at 15-20% with limited upside potential. The dominant 80% position of rival NSE and the rise of new digital asset exchanges are cited as structural challenges. This competitive landscape makes significant market share gains unlikely in the near term. ## Broader sector trends Indian exchanges have shown volatile performance recently amid global economic uncertainties and local regulatory changes. Financial services stocks remain particularly sensitive to policy shifts. BSE's trajectory aligns with these sector-wide patterns, reflecting the challenging operating environment. ## Implications for investors Market experts caution that consecutive downgrades may sustain pressure on BSE shares in the short term. However, long-term infrastructure investments and digital transformation initiatives could strengthen the exchange's position. Investors are advised to closely monitor regulatory developments and competitive dynamics in the exchange space. ## Sources covering this story - https://economictimes.indiatimes.com/markets/stocks/news/bse-shares-drop-3-after-second-downgrade-in-two-days-nuvama-lists-cas-among-3-key-headwinds/articleshow/133313313.cms — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._