BSE limited is the operator and owner of BSE Exchange. They are going to be public soon and is going to be the only exchange after MCX to go public. They are coming with an initial public offer which will hit the primary market on 23 January 2017. The company aims to raise around Rs. 1,243 Crore by offering shares at Rs. 805 – Rs. 806 per equity share.
BSE Limited was incorporated on July 9, 1875 as first stock exchange in Asia. They own and operate the BSE Exchange platform (the Bombay Stock Exchange). They are India’s largest stock exchange as they have more than 5000 companies listed on it. Compared to them NSE was started in 1992. They are one of the world’s 11th largest exchanges by market capitalization. Deutsche Bourse and Singapore Exchange are the world’s two leading global exchanges and strategic partners of BSE too.
They are the operator of BSE, so they regulate listed issuers and provide a market for listing and trading in various types of securities as may be allowed by SEBI from time to time. They operate in three primary lines of business, namely:
- The listing business, which consists of the primary market, which relates to the issuance of new securities.
- The market business, which consists of
- The secondary market, which relates to the purchase and sales of previously-issued securities,
- BSE StAR MF (“BSE StAR”), their online platform for the placement of orders and redemptions of units in mutual funds,
- NDS-RST, their platform for the reporting of over-the-counter corporate bond trading,
- Membership, which includes membership in the Exchange, membership in clearing corporation ICCL, and depository participants in their depository CDSL, and
- Post-trade services, namely the Clearing Corporation and depository.
- The data business, which consists of the sale and licensing of information products.
They also have supporting businesses, including
- Providing IT services and solutions,
- licensing index products such as the S&P BSE SENSEX,
- providing financial and capital markets training and
- Operating their corporate and social responsibility portal.
Some of the qualitative factors which form the basis for computing the Offer Price are:-
- a) Strong brand recognition with a track record of innovation;
- b) Diversified and integrated business model and active relationship with market participants;
- c) State-of-the-art infrastructure and technology; and
- d) Financial strength and diversified sources of revenue.
Object of the offer:-
The objects of the Offer are to:-
- To achieve the benefits of listing the Equity Shares on NSE and
- For the sale of Equity Shares by the Selling Shareholders.
The Exchange (BSE Limited) will not receive any proceeds of the Offer and all the proceeds of the Offer will go to the Selling Shareholders in the proportion of the Equity Shares offered by them.
The exchange is profitable for last 5 years and the profit for 2016 was Rs 132 crore compared to 2015 when it was 76 crore. Just remember that the exchange are direct beneficiary of
“The Price/Earnings ratio based on diluted EPS of Rs 22.45 on a restated consolidated basis and of Rs 24.16 on a restated unconsolidated basis in fiscal 2016 for the exchange at the upper end of the price band is as high as 35.90 times on restated consolidated basis and 33.36 times on restated unconsolidated basis, respectively as compared to the Nifty50 PE ratio of 22.50,” the exchange said in the newspaper notice. Compared to this, the only other exchange is MCX which is trading at an P/E of 21. But do remember that both are not exactly comparable and while BSE deals in stock, MCX mostly deals in commodities.
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