BSE Makes Strong Mar­ket De­but, Ends Up 33%

An­a­lysts see lim­ited up­side from cur­rent lev­els, ad­vise buy­ing stock on a fall to .₹ 950-1,000

The Economic Times - - Markets: Beating Volatility - Sanam.Mir­chan­dani@ times­

Mum­bai: Shares of Asia’s old­est bourse BSE made a strong de­but on Thurs­day, end­ing at a 32.8% pre­mium to its is­sue price of .₹ 806. The per­for­mance was the best list­ing day per­for­mance since RBL Bank, which ended up 33% on its first trad­ing day in Au­gust 2016. BSE is the first com­pany to raise money through an ini­tial pub­lic of­fer­ing (IPO) and to list in 2017.

The stock ended at .₹ 1,070.55 on the NSE after list­ing at .₹ 1,085, or 34.6% higher than the is­sue price. Dur­ing the ses­sion, it rose as much as 49% to a high of .₹ 1,200. BSE’s traded vol­ume was around 1.6 crore shares, mak­ing it one of the most ac­tively traded stocks on the NSE on Thurs­day. Bulk deal data on the NSE shows No­mura In­dia In­vest­ment Fund and No­mura Trust and Bank­ing Co bought a to­tal of 18.2 lakh shares of BSE while Small Cap World Fund picked up 16.3 lakh shares.

After the strong de­but, an­a­lysts see lim­ited up­side from cur­rent lev­els and ad­vised buy­ing the stock on a fall to .₹ 950-1,000. “If some­one has bought the stock in IPO, they should stay in­vested and those who have a two-year hori­zon can also buy at cur­rent lev­els. But at th­ese mul­ti­ples, I don’t see sig­nif­i­cant up­side in the near term,” said Ur­mil Shah, re­search an­a­lyst at IDBI Cap­i­tal Mar­kets and Se­cu­ri­ties.

An­a­lysts said the stock is trad­ing at a

price-to-earn­ings ra­tio of 47 times on a trail­ing ba­sis, while peer Multi Com­mod­ity Ex­change of In­dia is trad­ing at 46.5 times. With BSE be­ing the only listed stock ex­change, it is likely to en­joy scarcity pre­mium, which is likely to pre­vent sig­nif­i­cant down­side at least till the time ri­val NSE gets listed, an­a­lysts said. Ro­han Ad­mane, re­search an­a­lyst at Monarch Net­worth Cap­i­tal, said short- term traders can book profits and buy again on a fall to .₹ 1,000.

“In the equity trad­ing seg­ment, it faces com­pe­ti­tion from NSE. But in prod­ucts like cur­rency de­riv­a­tives and SME, it has a first mover ad­van­tage. There is strong growth po­ten­tial,” said Ad­mane.

At the time of its .₹ 1,243-crore IPO, BSE gar­nered high in­ter­est from all in­vestor cat­e­gories, with the is­sue be­ing sub­scribed 51 times. The is­sue saw por­tion re­served for qual­i­fied in­sti­tu­tional buy­ers and high net-worth in­di­vid­u­als be­ing sub­scribed 49 times and 159 times, re­spec­tively. Re­tail in­vestors’ cat­e­gory was sub­scribed over six times. The is­sue was en­tirely an of­fer for sale of 1.54 crore shares by 302 ex­ist­ing in­vestors.

The up­com­ing IPO of its sub­sidiary Cen­tral De­pos­i­tory Ser­vices, which filed draft pa­pers with the Se­cu­ri­ties and Ex­change Board of In­dia in De­cem­ber, will be a key trig­ger for BSE go­ing ahead, an­a­lysts said.

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