Shares of BSE Ltd climbed 5 per cent in Thursday's trade after the stock exchange informed NSE that its board of directors would meet on Sunday, March 30, 2025, to consider and approve the proposal for issue of bonus shares, subject to requisite approvals.
BSE operates as a securities exchange, providing a platform for trading in equities, derivatives, debt, and other financial instruments. Its revenue is primarily derived from transaction fees, listing fees, and technology solutions offered to market participants.
Shares of BSE climbed 4.72 per cent to hit a high of Rs 4,686.15. While the stock is down 15 per cent in 2025, it is up 87 per cent in the past one and 4517 per cent in the past five years.
"This is in continuation to the stock exchange intimation made by the company on March 26, 2025, thereby informing that a meeting of the board of directors is scheduled to be held on Sunday, March 30, 2025, to inter alia, consider and approve the proposal for issue of bonus shares, subject to requisite approvals," BSE informed NSE.
Ventura last week initiated coverage on BSE with a 'Buy' rating and suggested a target price of Rs 5,422 for the next 24 months. It said BSE at 32.1 times estimated FY27 EPS, is attractively valued relative to its growth potential. It added that its financial estimates are significantly conservative considering the recent sharp drawdowns in market volumes.
"Hence any reversion to mean will result in significant operating leverage. Market share equality with NSE would mean an optionality upside way above our estimates. Key risks: 1)Any regulatory changes affecting derivatives volumes, to competition from NSE and MSEI," it said.
Ventura said BSE is undergoing a strategic transformation, expanding its presence in the derivatives segment, with its market share in index options rising from 3 per cent to 10-15 per cent, aided by SEBI’s regulatory interventions that are reducing NSE’s dominance in the market.
"This supports our thesis that market share equality is not far off. Over FY24-27, we expect BSE’s EBITDA/ net earnings to grow at a CAGR of 80 per cent/70.2 per cent to Rs 2,287 crore/ Rs 1,944 crore, respectively. EBITDA margins are expected to improve by 2,730 bps to 55 per cent. As a result, return ratios – RoE and RoIC – are expected to improve by 1712 bps to 27.5 per cent and 2,493 bps to 24.9 per cent respectively by FY27E," Ventura said.
Ventura expect BSE’s revenue to grow at 47.7 per cent, compounded annually, over FY24-27, supported by higher transaction volumes and an increase in transaction charges from Rs 500 to Rs 3,250 per Rs 1 crore turnover. Notwithstanding the hikes, volumes have grown admirably and BSE has gained market share vis a vis NSE, it said adding that this should have a multiplier impact on revenues.