1. BSE IPO final day: Issue full but will institutions buy?

BSE IPO final day: Issue full but will institutions buy?

BSE IPO got bids from institutional investors for 21% of the reserved shares till end of the bidding yesterday, but retail investors’ participation was high with 173% oversubscription.

By: | Updated: January 25, 2017 9:17 AM
BSE Ltd, the owner of the Bombay Stock Exchange, has set the indicative price band for its initial public offering (IPO) at Rs 805-806 per share, looking to raise Rs 1,243 crore at the top end of the price range. (Image: Reuters) BSE Ltd, the owner of the Bombay Stock Exchange, has set the indicative price band for its initial public offering (IPO) at Rs 805-806 per share, looking to raise Rs 1,243 crore at the top end of the price range. (Image: Reuters)

Even as the much-awaited Rs 1,243-crore BSE Ltd’s IPO seems to have been oversubscribed on the back of high interest among retail investors, the institutional investors have shown low interest in buying into it so far.

BSE IPO, which opened on Monday and closes today, got bids from institutional investors for 21% of the reserved shares till the end of the bidding yesterday. However, retail investors’ participation was high, with the issue receiving 173% oversubscription for the shares reserved for that category. The overall issue was oversubscribed by 55%.

Earlier, the company raised Rs 373 crore by selling 46.28 lakh shares to the anchor investors.

About 28.6% of the issue is reserved for institutional investors, while about half the issue is reserved for retail buyers. With one day left for it to close, the issue will be watched closely for participation from institutional buyers.

BSE Ltd, the owner of the Bombay Stock Exchange, is looking to raise Rs 1,243 crore at the top end of its Rs 805-806 price range for its promoters and existing shareholders by selling a total of 1.54 crore shares. Asia’s oldest stock exchange owners’ IPO values the stock exchange at Rs 4,400 crore at the top end of the price range. The sale proceeds will go to the shareholders selling their stake, and not to the company.

While it had on Sunday sold the entire 30% of the issue kept for anchor investors, the remaining 1.08 crore shares are on offer for the public, including institutional investors and retail buyers.

Most brokerages and analysts recommend 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. However, The Financial Express had earlier today 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.

Check out the details here: BSE IPO: As analysts recommend buy, watch out for these 5 risks

Interestingly, BSE will be listed on the rival exchange NSE, due to SEBI’s regulations prohibiting exchanges from self-listing their stocks.

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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.

 

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