BSE Plans To Maintain Its Dividend Payouts After Initial Public Offer
BSE’s initial public offer opens on Monday.
India’s oldest stock exchange BSE Ltd. will hit the market with its initial public offer on January 23, 2017. The exchange has priced its IPO at Rs 805-806 per share, it said during a roadshow in Mumbai.
302 shareholders of the exchange, including Singapore Exchange Ltd. and Quantum (m) Ltd., are part-selling their holdings through the offer for sale that would constitute 28.26 percent of its fully diluted equity capital.
At the upper end of the price band, the exchange is valued at Rs 4,326 crore. BSE reported a profit of Rs 122.5 crore on a revenue of Rs 658.3 crore for the financial year 2015-16. The company posted a profit of Rs 104.9 crore on a revenue of Rs 383.5 crore in the first half of the financial year 2016-17.
BSE also disclosed that its 50-percent subsidiary Central Depository Services Ltd. will also come out with an IPO, and the exchange will divest 26 percent in the depository as per regulatory requirements. CDSL will cease to be a BSE subsidiary, which will have an impact on the exchange’s profits. Income from depository services stood at Rs 122.7 crore in the financial year 2015-16 and Rs 70.1 crore in the first half of the current fiscal.
Also read: How To Value The Bombay Stock Exchange?
Dividend Policy
BSE will continue with its current dividend policy. In the last financial year, the exchange paid 902 percent dividend, or nearly 85 percent of its net profits, said Ashishkumar Chauhan, managing director and chief executive officer of the exchange.
Chauhan said the exchange will continue to focus on new products and segments. It has operationalised India INX, its international exchange based out of GIFT City in Gujarat. The exchange is also awaiting nod from the market regulator, Securities and Exchange Board of India, to offer commodity trading. The company has a 50 percent operating profit margin, which it hopes to maintain on the back of new segments and products.