BSE Limited IPO: Subscribe - Hem Securities

Hem Securities | July 16, 2010, midnight

Issue Highlights:


Issue Date: 23rd Jan-25th Jan 2017

Price Band: Rs 805-806/Share

Bid Lot   : 18 & in multiplethereof

Face Value: Rs 2/Share

Listing   : NSE


Co own and operate the BSE exchange platform (formerly, the Bombay Stock Exchange), the first stock exchange in Asia, which was formed on July 9, 1875. As the operator of the BSE, co 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. Co operate in three primary lines of business, namely:


1. the listing business, which consists of the primary market, which relates to the issuance of new securities;


2. the market business, which consists of (i) the secondary market, which relates to the purchase and sales of previouslyissued securities, (ii) BSE StAR MF ("BSE StAR"), co's online platform for the placement of orders and redemptions of units in mutual funds, (iii) NDS-RST, co's platform for the reporting of over-the-counter corporate bond trading, (iv) membership, which includes membership in the Exchange, membership in co's clearing corporation ICCL, and membership of depository participants in co's depository CDSL, and (v) post-trade services, namely the clearing corporation and depository; and


3. the data business, which consists of the sale and licensing of information products. The offer consists of offer for sale of 15,427,197 Eq Shares


Reasons to "Subscribe"


Co has posted strong margin ratios as EBITDA margin for FY 2014, FY 2015, FY 2016 and the six months ended September 30, 2016 was 50.5%, 45.27%, 41.94% and 46.13%, respectively while profit after tax margin for FY 2014, FY 2015, FY 2016 and the six months ended September 30, 2016 was 27.89%, 22.23%, 19.89% and 29.69%, respectively. Also, co is debt free with almost zero debt in its book which is positive. At the end of October 2016, co is the world's largest exchange by number of listed companies and India's largest and the world's 10th largest exchange by market capitalization, with US$ 1.7 trillion in total market capitalization of listed companies. According to CARE Research, the BSE ranks third globally in terms of currency options and futures contracts traded in 2015, with 430 million currency derivatives traded.


Valuation


At price band of Rs 805-806 ,p/e multiple will turn out to be 20 on post issue annualized H1FY17 eps of Rs 39/share of company. Looking at after strong fundamentals & financial position of company, issue looks reasonably priced at current level. Hence we recommend "Subscribe" on issue.


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