BSE lists at 35% premium to its offer price; starts trading at Rs 1,085

BSE Ltd, the first listing of the new year 2017, opened for trading at Rs 1,085, a stellar 34.6% premium to its offer price of Rs 806 per share. The shares of India’s first stock exchange to be listed soon soared further, and were trading at up 1,111.3, after hitting a high of Rs 1,200.

The first mega IPO of the year had got an overwhelming response with an oversubscription of over 50 times the issue size. Institutional investor had bid for 48 times the shares reserved under the category. BSE Ltd is the owner of the Bombay Stock Exchange, Asia’s oldest stock exchange. Listing of the company will ensure liquidity for legacy stakeholders, BSE Ltd MD and CEO Ashish Chauhan said in an interview with ET Now immediately after listing.

Listing fees and the Mutual Fund platform will be the primary revenue earners for BSE India, Chauhan said, adding that the trading revenues are also picking up. Interestingly, BSE is listed on the rival exchange NSE, due to SEBI’s regulations prohibiting exchanges from self-listing their stocks. The company has about 9,500 member-shareholders.

BSE Ltd raised Rs 1,243 crore for its promoters and existing shareholders by selling a total of 1.54 crore shares. The IPO values the stock exchange at Rs 4,400 crore. The sale proceeds would go to the shareholders selling their stake, and not to the company.

Most brokerages and analysts recommended subscribing to the issue, given its low pricing, stable earnings from corporate services, potential upside to exchange business in the country, and other such factors. The Financial Express had earlier reported that retail investors must consider certain risks including current shareholders’ exiting the company, heavy dependence on equity trade outside the company’s control, smaller market share, valuation and other concerns.

With 5,868 companies listed on the main board, it is the largest exchange by the number of listed companies. Currently, BSE has a 14% market share in the Equity cash segment. It is India’s largest and the world’s 10th largest exchange by market capitalisation, with $1.7 trillion in total market capitalisation of listed companies.

BSE earns revenues from transaction charges, depository charges, corporate fees, data selling and treasury income from clearing and settlement funds. BSE earns revenues from transaction charges, depository charges, corporate fees, data selling and treasury income from clearing and settlement funds.