BSE Shares Make Blockbuster Debut, Soar Nearly 50% On Listing

Shares of BSE, Asia's oldest and the country's second-biggest stock exchange, made a blockbuster listing on the rival National Stock Exchange on Friday. BSE shares jumped as much as 49 per cent to hit high of Rs 1,200 compared to its issue price of Rs 806. 

Analysts were optimistic about the listing of BSE shares as its Rs 1,243 crore initial public offer (IPO) witnessed a whopping 51 times subscription led by robust demand from high net-worth individuals (HNI) and institutional investors. BSE IPO's retail segment also got good response with 6.5 times subscription. 

One of the reasons behind strong response to BSE's IPO was its valuation. At Rs 806, the upper end of its IPO price band, BSE's shares are valued at 20.6 times its FY2017 annualised earnings per share, which is a "reasonable" valuation, said Angel Broking. 

Established in 1875, BSE is Asia's oldest and world's tenth largest exchange according to market capitalisation of shares listed on its platform. 

BSE had 15 per cent market share in the equity cash market segment and 6 per cent share in the equity derivative segment. In interest rate derivatives and currency derivative derivatives, it had a market share of 17 per cent and 36 per cent respectively. 

BSE has a diversified source of revenue: In FY2016, 39 per cent of its revenues came from securities services, 26 per cent came from services to corporates, 4 per cent came from data dissemination fees and remaining 31 per cent came from investments and deposits. 

Analysts are optimistic about the revenue growth prospects of BSE as equity investment as a percentage of total savings in India is 5 per cent, which is very low compared to other countries. (14 per cent in China, 15 per cent in Brazil, 20 per cent in Indonesia and 42 per cent in USA). 

BSE shares closed 32.65 per cent higher at Rs 1,069.20 apiece.