In­vestor In­ter­est Points to a Strong BSE De­but To­day

Prod­ucts like cur­rency de­riv­a­tives, in­ter­na­tional ex­change to aid growth in fu­ture, say an­a­lysts

The Economic Times - - Smart -

Mum­bai: BSE, Asia’s old­est bourse, will be­come the first stock ex­change to list in In­dia on Fri­day. An­a­lysts ex­pect the bourse to make a strong de­but on the NSE af­ter its ini­tial pub­lic of­fer­ing (IPO) of ₹ 1,243 crore re­ceived sub­scrip­tion of 51 times, the high­est for any is­sue in sev­eral months. The stock could list at a pre­mium of 5-15% over the is­sue price of ₹ 806, said an­a­lysts. In the grey mar­ket, the stock was trad­ing at 21% pre­mium, or ₹ 170 a piece, to the is­sue price on Thurs­day.

“Given the mar­ket con­di­tions and the good sub­scrip­tion, BSE is likely to see a good de­but,” said Gee­tan­jali Ke­dia, se­nior re­search an­a­lyst at ad­vi­sory firm SPTul­sian.com.

BSE’s IPO was open for sub­scrip­tion be­tween Jan­uary 23 and Jan­uary 25. The IPO was en­tirely an of­fer for sale by 302 ex­ist­ing in­vestors, in­clud­ing Sin­ga­pore Ex­change and At­ti­cus Mau­ri­tius. The is­sue re­ceived bids for 55.20 crore shares com­pared to the 1.08 crore shares on of­fer, ex­clud­ing the an­chor in­vestors por­tion. The is­sue drew strong re­sponse from all in­vestor cat­e­gories.

“It de­serves a 5-10% pre­mium over the of­fer price based on the rea­son­able val­u­a­tions,” said G Chokkalingam, f o u n d e r, Equinomics Re­search and Ad­vi­sory.

SPA Se­cu­ri­ties, in a pre-IPO note, said BSE is avail­able at a price-toearn­ings ra­tio of 21.3 times based on es­ti­mated FY17 earn­ings, while the near­est com­pa­ra­ble com­pany Multi Com­mod­ity Ex­change of In­dia is trad­ing at 39 times. BSE re ported a net profit of ₹ 122.5 crore for the fi­nan­cial year 2015-16 on rev­enue of ₹ 658.3 crore. In the first half of 2016-17 fi­nan­cial year, the com­pany re­ported a profit of ₹ 104.9 crore and rev­enue of ₹ 383.5 crore. Though the com­pany has lost mar­ket share to ri­val NSE over the last few years, an­a­lysts said prod­ucts like cur­rency de­riv­a­tives and in­ter­na­tional ex­change could aid BSE’s growth, go­ing ahead. BSE is also likely to ben­e­fit from the value un­lock­ing through list­ing of sub­sidiary Cen­tral De­pos­i­tory Ser­vices, in which the ex­change has 50% stake, an­a­lysts said.

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