BSE IPO: Shares subscribed 0.13 times till noon
Asia's oldest stock exchange BSE's initial public offering (IPO) opened on Monday January 23, 2017. By noon, the exchange had received bids worth 14,13,846 shares amounting to 0.13 times of the total issue.
The total issue size for the IPO is 1,07,99,039 shares. National Stock Exchange (NSE) data show that 11,80,422 bids were received for shares at cut-off price.
NSE data show that Qualified Institutional Buyers (QIBs) did not bid for a single share till 12:26 pm. Non-institutional investors bid for 20,988 shares as against quota of 23,14,080 shares.
Retail investors bit 0.09 times or 5,12,388 shares against their quota of 53,99,519 shares.
IDBI Capital, in its research note on January 23, 2017 recommended investors to subscribe for the IPO. Urmil Shah of IDBI Capital said, "We believe that BSE Ltd provides good investment option in the form of 1) Right business and 2) Right valuation."
He further said, "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."
Anupam Bafna of Nirmal Bang said, "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."
Kajal Gandhi, Vishal Narnolia and Vasant Lohiya of ICICI Securities in their report on January 20, 2017 recommended subscribe rating to the IPO. They said, "At the IPO price band of Rs 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 Rs 4312 crore."