Dull response to BSE IPO with low institutional bids; issue subscribed 50% on day 1

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Updated: January 24, 2017 2:47:57 PM

BSE IPO got no bids from institutional investors till 3:40 pm. Even the retail investors’ participation remained lukewarm at bids for 0.21% of the shares, while the overall issue subscription remained low at 0.12%

BSE Ltd, owner of the Bombay Stock Exchange, is looking to raise Rs 1,243 crore at the top end of the price range for its promoters and existing shareholders.BSE Ltd, owner of the Bombay Stock Exchange, is looking to raise Rs 1,243 crore at the top end of the price range for its promoters and existing shareholders.

The much-awaited Rs 1,243-crore BSE Ltd’s IPO has got a lukewarm response with the institutional investors showing low interest in buying into it on the first day, even after the company raised Rs 373 crore yesterday by selling 46.28 lakh shares to the anchor investors yesterday.

BSE IPO, which opened today and closes on January 25, got bids from institutional investors for 17% of the reserved shares till the end of trading on Monday. However, retail investors’ participation was high, with the issue receiving bids for 86% of the shares reserved for that category. Overall issue subscription was at 50%.

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 yesterday 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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