Power My Portfolio Value Pick : BSE Ltd

Bombay Stock Exchange need no introduction.BSE is Asia’s oldest Stock Exchange, established in 1875,and one of the most identifiable brand names in India with high levels of recognition among investors, intermediaries and the general public.

Key Facts:

  • The total number of companies listed (Equity as well as Debt) on BSE as on March 31, 2017 was 5,834 .
  • BSE is world largest exchange in Number of Listed Companies.
  • The average daily value of equity turnover on BSE in FY 2016-17 was  4,025 Crore, an annual increase of about 34.35% from  2,996 Crore in FY 2015-16.
  • Annual Listing Fees (equity, debt and MF) increased by 2.82% to 104.19 Crore compared to 101.33 Cr in FY 2015-16.
  • BSE offers platform for Equity ,Bond  ETF, Offer for Sale (“OFS”) & Offer to Buy(“OTB”), MF via BSE StAR MF Platform.
  • BSE has retained a market share of over 57.60% in the retail trading of Corporate Bonds in FY 2016-17.
  • In November 2016, SEBI granted an in-principle approval to the Company for setting up an International Exchange(Indian INX ) and International Clearing Corporation in International Financial Services Centre (“IFSC”) situated at Gujarat International Finance Tec-City (“GIFT City”), Gandhinagar.
  • India INX offer a diversified portfolio of products and technology services at a cost which is far more competitive to Indian exchanges as well as other global exchanges.
  • BSE also provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. BSE also provides depository services through its arm Central Depository Services Ltd. (CDSL).
  • Post CDSL IPO , BSE holding in CDSL decrease to 24%. With current price of CDSL, BSE holding valued ~ 900cr.
  • Retail investors constitute only ~13% of stock ownership in India. Number of DeMat accounts in India is less than 10% of the total number of bank accounts which leaves tremendous scope for CDSL and BSE
  • Last year BSE declared total 27 INR dividend, which is 3% Yeild.
  • BSE charged INR 1 /trade to entities with volumes less than 50k trades per month which it has increased to INR 1.50/trade from Aug-17.
  • BSE has hiked charges across segments (including Listing Fees), which has provided boost to its revenues (especially transaction revenue) in FY17.
  • Even after the price hikes, BSE’s charges are at a steep discount to those of NSE.
  • NSE is still remain dominate player in cash and derivatives segment but still both this player have huge opportunity to grow.
  • Indian Economy is expected to become the third largest in the world by 2030.


Stock Outlook:

  • M-cap: INR 4833 cr
  • CMP: 899 INR (23th Jan 2018)
  • PE: 22.74
  • EPS: 40.23  INR
  • Book Value: 514 INR
  • Debt to Equity: 0
  • Share capital is 10.76 cr of FV 2.
  • Promoter Share holding : 37.13 %
  • FII/DII/FPI Share Holding :  33.39  %

Future Growth:

  • There is a clear case for growth in market cash volumes based on the following factors, which includes:
  •  Increasing retail participation
  •  Huge inflows in MFs
  • Greater penetration of capital market
  • Large number of upcoming IPOs
  • With current price of  INR 915 , BSE Ltd is highly undervalue considering huge growth potential and monopoly of 2 players.
  • For next 3-5 year Indian market is likely to grow rapidly and with that BSE also.
  • BSE should be part of your long term folio for good stable returns.

Be Smart. Invest Smartly.

Disclaimer : Please take advice of your financial advisor before any investment.

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