BSE (Bombay Stock Exchange)- Bet on Financialization?


(Vanshik Gupta) #146

Transaction charge on star MF will be charged from both new as well as exiting sips.


(TT) #147

I am a very strong proponent of rational valuation methodologies for assessing potential investments. That said, I believe the focus on “core” profits and “core” operations is a little misguided in BSE’s case. BSE’s core operations are changing from pure stock exchange activity to distribution activity. Think of it as a company with extremely wide and robust distribution framework. I am not saying that one start valuing the brand as an intangible value (whose value one can ascribe to be anything really, from conservative to astronomical), but to think more in terms of the fields BSE is entering and capturing high market share - the mutual fund platform and the upcoming insurance exchange.

Just today someone above has posted on the transaction pricing for the MF platform - this is value creation for shareholders that is currently not factored in by anyone. All the data on MF transactions on BSE are freely available. Anyone optimistic on the mutual fund trend remaining for the next 10-20-30-40-50-100 years (at whatever pace of growth) should be able to see some sort of potential here. I can also write reams on the active vs passive management discussion and the fact that developed economies have moved to ETFs rather than active management like MFs, but I do not think it is the right time to get into that discussion.

Their initiatives at India INX, debt, currency and interest rate derivatives are also doing well, and seeing developed markets, these segments will necessarily grow many thousands of times over in the future. How much of this will BSE capture, one cannot say. The exchange has very good market share in all these segments and in the hands of capable management, one cannot see why BSE should not maintain good market share there. StarMF has just been monetized - all these segments will also see proper monetization when the market size is larger and these segments become mainstream, which they have to. I see the changes Ashish Chauhan has brought since he took over a few years ago, and I see he is going to be here at least another 5 years. With his pedigree and proven performance, I see a reasonable likelihood that what happened to BSE in the equity derivatives space (which led to equity cash decline as well), would probably not happen in these other segments where BSE has been proactive and captured market share quickly (yes, I am aware they have captured market share by underpricing NSE, and no, I do not think it shows you are inferior competitor).

Therefore, departing from my usual practice, I do not value BSE on “core” operations and “core” profits. You can say it’s all fluff, speculation or not grounded in fact, but that’s what makes up the market - differing opinions.


(Vanshik Gupta) #148

Bse will gain volumes on its index derivatives very soon, by looking at INX and DGCX Dubai …volumes on S&P sensex50 are increasing, and on same volumes on NSE nifty 50 are decreasing at NSEIFSC.
It is due to the joint venture between BSE and S&P Dow (Asia index). just an observation.


(TT) #149

That will be on IFSC side, which they are not planning to monetize for another 2 year or so (i think, based on what i remember from concalls). But your point is valid, INX has good volumes.


(Vanshik Gupta) #150

On 7 Nov 2017 concall …they said from this yeat 2018 , they will start monetize. If fiis will concentrate on sensex 50 in ifsc then why not they will trade sensex50 on regular platform.


(Mridul) #152

This might be far fetched thought, though i am seeing a lot more volumes on BSE in many stocks in this qtr especially with block/bulk deals i.e many block deals are happening on BSE. It might just be a coincidence, or a result of the BSE strategy - lower charges for larger volumes.Saw it in Hikal during last couple of days, MPS, Sterlite, and many other stocks. Just an example -

Important thing - I am only seeing this happening when the volumes are large i.e. not happening everyday, but only when someone is trying to buy big chunks. On average days, status quo remains.

Anybody noticed something like this consistently this Feb/March?

PS: I might be completely wrong here.


(Chandrasekar) #153

You are correct. I too observed that from less than 10% of NSE’s volumes, BSE is now atleast 12-15% of NSE. During bulk deals, it makes more sense to go with BSE due to lower charges and their execution speed. Over a period of time, if BSE could sustain its technology advantage, atleast 20% of total trades could happen in BSE in the next year or two.


(Value Seeker) #154

All good points. I was surprised to see though that the BSE stock itself is listed only on the NSE. Any reason for that…or is it just a symptom of the cook not wanting to eat his own cooking?


(Gnana) #155

SEBI regulation, BSE is not allowed to list their own shares on their platform, hence listed only on NSE


(Vanshik Gupta) #156

Derivatives Volumes are definitely shifting from NSE India to INX in S&P sensex50…because it will be same for fiis to trade in India or gift city after 1 April …major hindrance of short term capital gains waived off.
Yesterday INX record turnover crossed 500 million.


(Shan) #157

What you want to look at in general is EV to EBITDA ratio, also called the acquirers multiple. Correct EV calculation will reduce mcap by surplus cash and EBITDA is before taxes.

Of course no decision should be made on the basis of just one ratio but this is a good starting point.


(Chandrasekar) #158

Similarly, when NSE gets listed, it will be listed in BSE :slight_smile:


(Ankur Vohra) #159

Upgrade by Motilal Oswal.BSE.pdf (239.4 KB)


(Dana) #160

(sta) #161

Can someone please explain in layman language what are the different moving parts of bse. Or guidance to some source where we can better understand all the parts. Thanks


(manivannan.g) #162

CBI searched in Mr.Ravi’s residence on Friday.


(kashif kidwai) #163

I found this video very helpful to understand the business and its history. https://www.youtube.com/watch?v=JzZt5kUX9ps&t=2559s


(rajput.delhi) #164

BSE div 36…good to be proved wrong :grinning:

Can’t see the results on cell…can someone post them here pls?
Thx
RR


(Mukesh Verma) #165

Here’s the link Click

Media Release

Consolidated Revenue from Operations up by 28% to Rs 476.98 crore for the year ended March 31, 2018 from Rs 373.65 crore for the year ended March 31, 2017

Consolidated EBITDA up by 24% to Rs 321.94 crore for the year ended March 31, 2018 from Rs 260.13 crore for the year ended March 31, 2017

Consolidated Net Profit up by 222% to Rs 711.28 crore for the year ended March 31, 2018 from Rs 220.57 crore for the year ended March 31, 2017

ü Currency Derivative Segment average daily turnover increased by 77% to Rs 21,625 crore for Q4FY18 from Rs 12,215 crore in Q4FY17.

ü Monthly orders processed in Mutual Fund Segment increased by 176% to 21 lakh for Q4FY18 from 7.6 lakh in Q4FY17.

ü Average daily turnover in India International Exchange (IFSC) Ltd., BSE’s wholly owned subsidiary at GIFT City, Gandhinagar was USD 240 million for Q4FY2018 from USD 3 million for Q4FY17.

ü Final dividend of Rs 31 per equity share proposed in addition to the interim dividend of Rs 5 per equity share paid in February 2018 taking the total dividend for the financial year to Rs 36 per equity share.

MUMBAI, May 4, 2018 : BSE Ltd. (BSE), Asia’s oldest and World’s fastest exchange with a speed of 6 microseconds, announced its audited consolidated financial results for the fourth quarter and year ended March 31, 2018.

Financial Highlights for Year Ended on March 31, 2018

Ø Year ended on March 31, 2018

· Revenue from Operations for the year ended March 31, 2018 increased by 28% to Rs 476.98 crore from Rs 373.65 crore for the year ended on March 31, 2017

· EBITDA for the year ended March 31, 2018 increased by 24% to Rs 321.94 crore from Rs 260.13 crore in the year ended on March 31, 2017

· Net Profit from continuing operation for the year ended March 31, 2018 increased by 33% to Rs 237.31 crore from Rs 178.51 crore in the year ended on March 31, 2017

· Net Profit attributable to shareholders of the Company for the year ended March 31, 2018 increased by 222% to Rs 711.28 crore from Rs 220.57 crore in the year ended on March 31, 2017

· Earnings per share from Continuing Operations after exceptional items for the year ended on March 31, 2018 at Rs 43.51 per equity share.

· Earnings per share from Total Operations after exceptional items for the year ended on March 31, 2018 at Rs 130.41 per equity share.

Ø Quarter ended on March 31, 2018

· Revenue from Operations for the quarter ended March 31, 2018 increased by 19% to Rs 136.57 crore from Rs 114.83 crore for the quarter ended on March 31, 2017 and increased by 9% from Rs 125.70 crore for the quarter ended on December 31, 2017.

· EBITDA for the quarter ended on March 31, 2018 increased by 23% to Rs 85.19 crore from Rs 69.16 crore in the quarter ended on March 31, 2017 and increased by 6% from Rs 80.74 crore for the quarter ended December 31, 2017.

· Net Profit from continuing operation for the quarter ended on March 31, 2018 increased by 26% to Rs 62.08 crore from Rs 49.15 crore in the quarter ended on March 31, 2017.

· Net Profit for the quarter ended on March 31, 2018 increased by 3% to Rs 62.08 crore from Rs 60.11 crore in the quarter ended on March 31, 2017 and increased by 6% from Rs 58.67 crore for the quarter ended December 31, 2017.

· Earnings per share from Continuing Operations after exceptional items for the quarter ended on March 31, 2018 is Rs 11.41 per equity share.

Business Highlights for the Quarter Ended March 31, 2018

· Monthly orders processed in Mutual Fund Segment increased by 176% to 21 lakh for the quarter ended March 31, 2018 from 7.6 lakh for the quarter ended March 31, 2017

· Currency Derivative Segment average daily turnover increased by 77% to Rs 21,625 crore for the quarter ended March 31, 2018 from Rs 12,215 crore for the quarter ended March 31, 2017

· Average daily turnover in India International Exchange (IFSC) Ltd., BSE’s wholly owned subsidiary at GIFT City, Gandhinagar was USD 240 million for the quarter ended March 31, 2018 from USD 3 million for the quarter ended March 31, 2017.

· Equity Cash Segment average daily turnover decreased by 31% to Rs 4,711 crore for the quarter ended March 31, 2018 from Rs 6,810 crore for the quarter ended March 31, 2017

Commenting on financial performance for the year, Shri Ashishkumar Chauhan, MD & CEO, said: “BSE’s growth in financial year 2017-18 is attributable to the its technological edge, superior planning & execution capabilities. BSE would continue to focus on providing more value added and new products and services for inclusive growth of all its stakeholders.”

About BSE

BSE (formerly Bombay Stock Exchange) established in 1875, is Asia’s first & now the world’s fastest Stock Exchange with a speed of 6 microseconds. BSE is India’s leading exchange group and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder base that includes the leading global exchange- Deutsche Bourse, as a strategic partner. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate derivatives, mutual funds and stock lending and borrowing.

BSE also has a dedicated platform for trading in equities of small and medium enterprises (SMEs) that has been highly successful. BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE’s systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments.

Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on the BSE trading platform and provides full novation, guaranteeing the settlement of all bonafide trades executed. BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), associate company of BSE, is one of the two Depositories in India.

Media Contact

Yatin Padia / Rahul Vyas

022 2272 8516 / 2272 8472

[email protected] / [email protected]


(Ashish) #166

Seems like excellent results.

Here is some more details on StarMF platform directly from horses mouth.