BSE share price crashes 66% in a day? Here’s what caused this huge drop
The BSE Ltd. share price seemingly collapsed by a whopping 66% in a single day on 23 May 2025, leaving shareholders in shock and confusion. This decline was not the result of a fundamental weakness of the company or any negative news on BSE Ltd. Rather, it was a technical adjustment related to a 2 for 1 bonus share announcement made later by the exchange.
In a 2 for 1 bonus issue, every existing share holder receives 2 shares for every share they currently hold. This will affect the total shares outstanding but it does not impact the totality of the investors’ investment values. Therefore, the share price is found by taking a reduction in price to accommodate the bonus. If a share was previously trading at approximately ₹7,015 then on the ex-bonus date it should begin trading at approximately ₹2,338, as the number of shares has tripled on the ex-bonus date.
Such a revision is normal and should not be taken as a decline in the market value of the company or a sign of poor performance. Alas, such modifications are occasionally misunderstood by retail investors or fail to get reflected instantly with perfect accuracy on all trading platforms, leading to transient panic.
Adding to the misconception were reports indicating that SEBI would contemplate permitting the National Stock Exchange (NSE) to move its weekly index options expiry from Friday to Tuesday, a development that would affect BSE’s increasing contribution in the derivatives segment. Even though this regulatory shift has yet to be made, speculation regarding it was part of the sentiment.
Although it appears to be a large drop it is important to remind investors that this is merely a mathematical adjustment, and is not a loss of value. The basic principles off BSE are sound, and – in the past – a bonus issue is a good thing for the shareholders, and, brings liquidity. Overall, there is no concern over the 66% drop in the price of BSE shares. This is a normal market adjustment following a bonus share issue, and investors should have nothing to panic about.
