The IPO of BSE LTD is open for subscription. Here are the leading brokerage Reviews and Recommendations.
Nirmal Bang Analyst Anupam Bafna said,
BSE is still second largest exchange in volume term and world's largest exchange by number of listed companies. We feel With Market Cap of Rs. 4,326 Cr at upper end of price band and Free cash of Rs. 2,681 Cr, the Enterprise value of Rs. 1,646 Cr is attractively priced considering the optional value of success of any new initiative. At Upper band of Rs. 806, BSE is offered at 15.9x EV/EBITDA and 26.7x PE of H1FY17 annualised earnings. We recommend subscribing to the issue.
ICICI Direct Research Analysts - Kajal Gandhi, Vishal Narnolia and Vasant Lohiya said
At the IPO price band of | 805-806, the stock is available at a multiple of 35.2x FY16 P/E at the upper end of the price band. Post issue market capitalisation is at ~| 4312 crore. Priced at ~35x FY16 PE; SUBSCRIBE from long term investment horizon
Amod Joshi of Spa Securities said,
At the upper end of the price band, the stock is available at P/E of 21.3x based on FY17E earnings. It’s nearest comparable MCX is trading at P/E of 39x based on FY17E earnings. We recommend SUBSCRIBE to the issue with long term perspective.
Jayant Kastrhuri of Dolat Capital said,
BSE has a 17% market share in Equites and derivatives trading way below NSE’s market share and 40% market share in currency derivatives segment. Given the under penetration of equities as an investment vehicle, it should be able to cling to its market share. It had a payout ratio of 41% in FY16 and we expect it will go up once it gets listed. Hence this should be subscribed by long term investors who are looking to own defensive plays.
IndiaInfoLine Research Said,
At the upper end of the issue price band, i.e. Rs.806, the stock is available at a P/E multiple of 20.6x on FY17E annualized earnings as compared to MCX, which is trading at P/E of ~40x. We believe the valuation demanded by the company is justified and hence recommend a ‘SUBSCRIBE’ to the issue
Gupta Equities Research Recommendation on the IPO of BSE LTD is as under,
BSE Ltd.(BSE) stands to gain from operating leverage. At a P/E of 35.8 xs of FY16 EPS and 21xs of trailing earnings. We believe that BSE Ltd. demand a discount to its domestic peers. We assign a Subscribe rating to the IPO.
Dalal & Broacha is of the following opinion,
Over the longer term, we believe the Indian Equity market will grow considerably, which should consequently result in significant volumes and transaction revenues for BSE. Although BSE’s market share in the Equity Cash & Equity Derivative markets remains low, we feel the current valuation offers enough room for appreciation over the long term. We opine investors to APPLY FOR LONG TERM GAINS.
IDBI Capital's Urmil Shah has the following recommendation,
We believe that the stock exchange business has significant entry barriers. While BSE Ltd has significantly lower market share vs. the National Stock Exchange, it is currently the best option in the listed space. Further, we believe that with cash per share of Rs512 (64% of issue price) and implied PER of 35x FY16 EPS vs. 56x for MCX, the BSE Ltd’s IPO is available at reasonable valuation.
Jaymin Trivedi of Aditya Birla Money said,
Equity savings as a percentage to financial savings in India is hardly 5% while majority of EM economies are at 15-20% and developed economies have 30-40%. Market cap to GDP stands at 73.1% which is at median level. With demographic advantage and initial incline seen towards financial and equity savings, we expect the exchange industry shall witness healthy growth going ahead. Subscribe
Reliance Securities Analyst Ashutosh Mishra said,
Further, the BSE shareholders will also get incremental benefit from the listing of Central Depository Services (CDSL), in which BSE will offload 26.1% stake (out of 50.1% stake) in IPO through Offer for Sale. As we believe that the IPO is attractively priced, we therefore recommend SUBSCRIBE to the Issue.
Prabhudas Liladhar analyst Pritesh Bumb and R Sreesankar said
We believe, BSE will continue to adopt new innovative platforms, put up strong tie‐ups globally and retain its brand recall. Exchange platforms in India will remain a steady cash flow business on back of strong economic growth and improving capital market penetration. At the upper band of Rs806, the exchange would trade at 35.3x FY16 Consol EPS of Rs22.8 and 1.8x BV and we recommend to Subscribe for long term gains.
