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NVS Wealth Managers Investment Advisers
BSE Profile
BSE, Asias first Stock Exchange and one of Indias leading exchange groups, was initially established
as "The Native Share & Stock Brokers' Association" in 1875.
BSE provides an efficient and transparent market for equity, derivatives, debt instruments, mutual funds, IPO
bidding and OFS bidding. BSE also provides a host of other services to capital market participants
including risk management, clearing, settlement, market data services and education. Over the
past 140 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an
efficient capital raising platform and is the world's No.1 exchange in terms of the number of listed
companies (over 5500).
BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock market
benchmark index. It is traded internationally on the EUREX as well as leading exchanges of the BRCS
nations (Brazil, Russia, China and South Africa).
The S&P BSE SME IPO Index was launched in December 2012. BSE is the first exchange in India
to launch this type of Index for SMEs. The Index enables investors to track the performance of SME
companies listed on BSEs SME platform, currently having 110 companies listed on the exchange.
BSE member stock brokers who were allotted 10,000 Equity Shares of BSE at Re. 1 each at par in 2006-
07, sold 51% of the total equity of BSE to non-members viz, Singapore Exchange Ltd. (SGX), Deutsche
Bourse (German Stock Exchange), Foreign Institutional Investors (FII), Financial Institutions,
Large Corporates and HNIs for Rs. 400/Share immediately after receiving a bumper bonus of 12:1 in the
year 2008-09. Thus BSE member stock brokers earned a whopping ~Rs. 5,200/Share (pre-bonus
share price).
BSE rewarded its shareholders with bumper bonus issue in the ratio of 12:1 in 2008-09 and now the
share price of BSE stands at Rs. 400/Share (pre-bonus share price of ~Rs. 5,200/Share) with a Face
Value of Re. 1.
The International exchange will provide an electronic platform for facilitating trading, clearing and
settlement of securities, commodities, interest rates, currencies, other classes of assets and derivatives by
international investors in the GIFT SEZ-IFSC, subject to necessary approvals and operating guidelines
for IFSCs. The International exchange will open up a new revenue stream for BSE Ltd and add to
its profitability.
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The new exchange will provide a platform for Indian companies to raise capital by issuing foreign
currency instruments, allow start-ups to raise equity from foreign investors by getting listed on
the international exchange and also allow companies incorporated outside India to list in the
International Financial Services Centre.
It will enable members to trade from the international financial services centre in global capital
markets such as NYSE, LSE, NASDAQ, etc., which many brokers are currently doing from
other financial centres such as Singapore and Hong Kong.
The cost of operating at GIFT City that houses Indias first International Financial Services Centre (IFSC)
will be about 80% less when compared to similar destinations in Dubai, Singapore and Hongkong.
BSE Ltd.
Provides depository and ICCL carries out the BIL in ties with various Leading provider of cutting
record keeping services function of clearing, national and edge IT solutions with
to the securities industry settlement, collateral international focus on Equity, Stock
in India, facilitating management and risk educational institutions, Commodities, Banking and
dematerialization of management for various conducts certification Financial Services markets
holding of securities and segment of different courses and post in India. In FY15-16, the
book-entry settlement. stock exchanges. 20 graduate programs to company earned a total
In FY15-16, the company banks are empanelled promote financial income of Rs.28.75 Crs
earned a total income of with ICCL as Clearing education across the and PAT of Rs.2.4 Crs
Rs.116 Crs and PAT of Banks for BSE activities. globe. In FY15-16, the
Rs.63.4 Crs In FY15-16, the company company earned a total
earned a total income of income of Rs.17.8 Crs
Rs.69.6 Crs and PAT of and PAT of Rs.75 Lakhs
Rs.48.29 Crs.
*In October 2016 BSE sold 4.15% stake in CDSL for Rs.34.2 Crs valuing CDSL around Rs.825-830 Crs. Now CDSL is filing for an IPO
wherin BSE will sell 26% stake valuing CDSL around Rs.1200-1500 Crs. This would create a windfall gain to BSE of around Rs.300-350
Crs.
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NVS Wealth Managers Investment Advisers
The average daily value of equity turnover for FY 2015-16 was Rs. 2,996 Crs vis-
Equity Trading -vis Rs. 3,552 Crs in FY 2014-15, a decrease of 16%. Transaction charges rose 9%
to Rs.55 Crs from 50 Crs.
As per WFE statistics, BSE is ranked the 5th most liquid index options market in
the world, as on March 2015. BSE Ltd has decided to stop the LEIPS Scheme and
Derivatives Trading instead introduce incentives in terms of technological support to gain market
share in this segment.
BSE is the largest exchange in the world in terms of number of Currency Options
Currency contracts traded and 3rd largest in the world in terms of number of currency
futures contracts traded (Source: WFE).). BSEs market share increased to 36.41%
Derivatives in FY16 from 33.86% in FY15. Open Interest in FY16 also increased 93.82%.
In the Fixed Income Segment, BSE offers Reporting of Secondary Market Trades
in Government Securities, Treasury Bills, Corporate Bonds, Certificate of Deposit
Debt Segment (CDs) and Commercial Paper (CPs) on the platform called Indian Corporate
Debt Markets (ICDM).
BSE offers trading in following two products, 91-Day T-Bill Futures and 10-yr G-
sec Futures
Interest Rate The Interest Rate Derivatives Segment already has more than 299 registered
Derivatives Trading members. The segment has witnessed a turnover of Rs. 41,913 Crs till 31st
March, 2015. During FY 15-16,BSEs market share increased to 17.19% from
8.85%.
BSE and Deutsche Bourse have entered into a partnership in October 2013 under
Data Information which Deutsche Bourse would act as the licensor of BSE market data and
Products information to all international clients. The total revenue from this segment was
Rs. 22.42 Crs in FY 2015-2016 as compared to Rs.22.1 Crs in FY14-15.
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BSE Ltd., is an institutional brand with an immense value attached to it and it has been synonymous
with the capital markets in India. Its S&P BSE SENSEX is the benchmark equity index that reflects
the health of the Indian economy.
BSE Ltd is expected to add one more to its record of firsts, when it will be listed and it will be one
of the most valued and desired stock as it will be the only Exchange to be listed in India.
We believe that when BSE comes up with an IPO, it is expected to be listed at Rs. 400/Share, valuing
the stock exchange at not less than Rs. 4,150 Crs, thus creating a huge value for its investors.
On 22nd May 2014, BSE announced USEs merger with itself via swap of shares. Under the merger
terms, a USE shareholder received 1 share of BSE for every 385 shares held. The deal valued BSE at ~Rs
3,900 Crs. and USE at ~Rs 150 Crs.
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NVS Wealth Managers Investment Advisers
BSE has large embedded value from its direct and indirect subsidiaries - CDSL, ICCL, BIL,
MTPL etc., especially most of them being profit making and earning good margins. BSE Training Institute
(BIL) is a strong brand name for finance related courses and has tie ups with Top Educational
Institutes. The education sector is highly valued in the markets. As and when these all subsidiaries grow
larger and maybe even get listed, then BSE can unlock huge value for its stakeholders.
BSE which holds 54.20% in CDSL, has got SEBI nod to get CDSL listed and bring its holding down to 24% to
comply with SEBI norms, this will bring huge unlocking value to BSE. BSE is currently valuing CDSL at
around Rs 800 Crs.
Thus Rs. 400/share price of BSE is without even considering huge brand value of BSE, which can
possibly add huge value to the stock in the near future.
Billionaire Investor George Soros acquired 4% equity stake through his hedge fund Quantum
(Mauritius) from Dubai Financial Holding, at about Rs 375-380 per share, in August 2010.
Other Developments
Liquidity Enhancement Incentive Programme (LIEPS)
BSE has decided to discontinue the LIEPS on single stock options contracts which shall significantly
reduce the expenses incurred on the same. Presently LIEPS charges amount to Rs. 17 Crs in FY16 (Rs. 34
Crs in FY15).
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Whilst NVS has taken all reasonable steps to ensure that this information is correct, NVS does not offer any warranty as to the accuracy or
completeness of such information. Any person placing reliance on the report to undertake trading does so entirely at his or her own risk and
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not necessarily an indication to future performance.
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have no known material conflict of interest, no financial interest and no part of the research analysts compensation was, is or will be, directly or
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The analyst or its associates have not received any compensation or other benefits from the Subject Company or third party in connection with
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The value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial,
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complete and it should not be relied upon as such. Opinions expressed herein are current opinions as of the date appearing on this material and
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objectives, financial resources and other relevant circumstances.
Rating Scale : This is a guide to the rating system used by our Research team. Our rating system comprises six rating categories, with a
corresponding risk rating.
Risk Rating
Neutral NA NA NA
Not Rated NA NA NA
Please Note: Our recommendations are for a minimum period for one year.
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