Jefferies says Sebi's proposed CAS changes will remove uncertainty, but still remains negative on BSE. Here’s why

Jefferies believes Sebi's latest proposal to change the Closing Auction Session (CAS) will reduce uncertainty in the stock market, though they still hold a negative view on BSE shares. The proposal aims to address concerns about volatility during the CAS, which initially led to higher losses for domestic prop traders. The new CAS framework will use volume weighted average (VWAP) for expiry-day settlement prices, eliminate cancellations of limit orders placed beyond +/- 1% of the reference price, and allow unexecuted iceberg orders to be transitioned to CAS, increasing liquidity.

However, Jefferies remains negative on BSE shares due to the options industry barely growing over the past two years, potential RBI tightening of bank guarantee norms, and a possible management transition at BSE by June 2027. Jefferies prefers Groww, expecting the company to benefit from resolved CAS issues, with a 'Buy' rating and a target price of Rs 240 apiece, indicating nearly 20% upside potential from the current closing price.