In short -
BSE Ltd. is not just about equities. There are at least 10 other financial platforms/products where BSE has invested in last few years and is actively pursuing volumes and revenues. Revenue contribution from those platforms and products is currently meager, but is growing or is expected to grow gradually as momentum builds. Equity forms a large part of the revenues, no doubt. Any slow down in equity markets will impact trading revenues for sure.
Though, one should take note of the listing revenues; This will increase going forward with more and more companies listing on SME platforms and then eventually shifting to the main platform. Also, there is a fair chance of increase in listing fee every 3-4 years (in sync with the market leader NSE).
Moreover, companies are increasingly looking towards raising money in debt market. You can see huge increase in volumes in this segment. This will gain much more traction as India story unfolds.
Star MF platform has decent share of the overall MF volumes. This is all about volumes! They have started charging from a few MFs. I believe this trend will increase going forward.
Currency market is also going to get traction as the size of Indian GDP gets bigger. Target - 5 trillion economy in next 7-8 years. More imports, more exports, leading to more and more hedging requirements. Currency trading market is nascent at the moment.
We already know all about INX. We will see something happening there in 3-5 years. It is in investment stage and is competing with NSE (much ahead of the competition in fact). Favorable tax changes in this budget for Gift City exchanges is going to help improve volumes there.
There are many other revenue streams such as data dissemination, CDSL, which will get better over time.
Bottomline - A country’s exchange is a proxy play on country’s economy and GDP growth. If one believes in India story (despite India’s political environment), BSE is a good place to remain invested in. Though, this is a multi-decade investment one should sleep over. Available at very good valuation, good war chest, and superb management at the helm.
Disclaimer: Invested. Added more in last 3 months.