To tap the growing number of passive investors, BSE’s Asia Index plans to launch as many as 40 more indices across sectors this fiscal — double the number in FY25. “At a run rate of 2-3 indices per month, we will launch roughly 40 indices this year,” said Asia Index MD Ashutosh Singh on the sidelines of an event to launch four factor indices – BSE 500 Enhanced Value 50, BSE 500 Low Volatility 50, BSE 500 Momentum 50, and BSE 500 Quality 50.
Dinesh Iyer, product head, said that the pipeline of indices would be across categories — thematic, factor and broader market. While some are driven by asset management companies, some are internal, he added.
According to Singh, after 2014, the sudden growth in the passive market was driven by two leapfrog moments — the year when Employees’ Provident Fund Organisation (EPFO) decided to invest its funds into the Nifty and Sensex ETFs and the second came a few years later when the markets regulator came up with the categorisation circular that limited the room for innovation on the active side.
In response to these development, exchanges have been aggressively launching indices, both to meet demand from mutual fund houses who will be able increase their assets under management by launching schemes based on them. In addition, it has also become a new line of business for exchanges as they are paid around a percentage point of the assets collected by schemes that use these indices as benchmark.
In FY25, BSE and NSE collectively launched 41 indices — over three a month. In comparison, NSE had launched just seven in FY23 and FY24 while BSE hadn’t launched any index, according to its subsidiary Asia Index’s website. Effective June 1 last year, BSE’s holding company had acquired control of Asia Index by acquiring a 50% stake from the joint venture partner S&P and Dow Jones Indices.
Singh said, in terms of market share, BSE is way below its peer NSE and is not looking at gaining market share . The aim is to look inwards at BSE’s own product bouquet as there are enough whitespaces to fill. Currently BSE’s market share is roughly 20%, he added.
As of March-end 2025, NSE had 73% of the total Industry AUM of the equity and debt passive funds linked to Nifty indices, according to its investor presentation. The exchange earned 1% of its total revenue from index licensing and data licensing services in the quarter ended March. For FY25, the income stood at Rs 121 crore, up 23% compared to last year.