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Sunday, January 22, 2017

BSE Limited IPO at a glance


Issue Highlights

Issue Period
23/1/17-25/1/17
Price Band (Rs.)
805-806
Issue Size(shares)
1,54,27,197
Issue Size (Rs. crore)
1243.43
Issue Type
100% Book built
Face Value (Rs.)
2
Listing
NSE
Industry
Stock Exchange
Registrar
Karvy Computershare Pvt Ltd.
Minimum Bid Quantity
18 shares
Maximum Retail Subscription
Rs.  1,88,604 (13 lots)
BRLM
Edelweiss, Axis Cap, Jefferies, Nomura

Issue Details

Offer for Sale: 1,54,27,197
Fresh Issue:   Nil
Equity Shares Outstanding Prior to Issue: 5,36,78,172
Equity Shares Outstanding After the Issue:  5,36,78,172

Objects of the Issue

1.           The issue is pure offer for sale and thus no proceeds shall be received by the company (exchange)
2.           To avail listing benefits on NSE
3.           Sale of equity shares by selling shareholders

Company Profile

BSE Limited owns and operate the BSE exchange platform-the world’s largest exchange by number of listed companies and India’s largest exchange by market capitalization. The revenue from operations consists of (1) revenues from security services (2) revenue from service to corporates (3) revenues from data dissemination fees, income from investments and other income. Around 64 % of the total revenue comes from security services segment. As far the revenue (equity & derivatives) is concerned, BSE is nowhere in comparison with the same of its competitor NSE.

Risks & Threats

   1         As far as derivative trading is concerned BSE Ltd lags NSE significantly
   2         The exchange is not as user friendly as NSE, and hence a lot of brokers and traders prefer to trade on NSE
   3         The operating cash flow is negative for a few past years
   4         Revenue from trading activities is almost stagnate over past 4 years and profit CAGR is negative
   5         As per SEBI regulations, the stake in its subsidiary CDSL needs to be reduced to 24 % from present 50.5 %, and the same will result in a fall in both revenue and profitability of the company

Financial Profile

Parameter
FY 16 Value at upper price band
Post Issue PE Ratio
35.31
Profit CAGR
Negative
Post Issue Price to Book ratio
1.77
Return on Equity (%)
5%
Return on Capital Employed (%)
8.17
EV/EBITDA
14.3
Net Profit Margin (%)
28.7







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