 "A man looks at a screen across the road displaying the Sensex on the facade of the Bombay Stock Exchange (BSE) building in Mumbai")
The consolidated net profit of BSE Ltd for 2015-16 declined 38 per cent to Rs 96.7 crore from Rs 155.5 crore the previous year.
The dip could impact the stock exchange’s valuations when it issues an initial public offering (IPO) of shares a few months later. The board of directors approved the plan to do so on Thursday. The plan is to file the offer document by July, with the IPO by December.
Overall expenses grew 19 per cent to Rs 419 crore, with employee and technology related spending up 13 per cent. Standalone net profit grew 4.6 per cent to Rs 106 crore from Rs 101 crore the previous year.
“BSE has seen a dip in cash market volumes, its mainstay, and its market share in the segment would have fallen by at least a couple of percentage points,” said a broker who closely tracks developments in the exchange. “The derivatives segment has also seen a sharp dip in revenues.”
Consolidated net profit for the quarter ended March dropped 71.5 per cent to Rs 12 crore, from Rs 42 crore in the same quarter of the earlier year. Total income for the period rose 13.8 per cent to Rs 173 crore.
Equity derivative volumes slid to a four-year low, owing to the recent increase in derivatives contract size and the exchange’s decision to gradually trim its incentive structure for market makers.
BSE’s group companies include Indian Clearing Corporation, CDSL, BSE Institute and Marketplace Technologies.
As for the IPO plan, approved on Thursday as mentioned earlier, it was cleared by the board in the presence of U K Sinha, chairman of the Securities and Exchange Board of India, the markets regulator. He'd been invited as a special guest and a brief presentation on the steps taken in the direction of listing was shown to him.
Subsequently, Edelweiss, main lead manager for the IPO sale, made a presentation to the board on the IPO road map, said a BSE.
It will be the first equity exchange to issue an IPO. Sources said this would be entirely an Offer for Sale and not involve an issue of new shares. Around a fifth of BSE’s equity is likely to be offloaded. The issue price is likely to be between Rs 400 and Rs 600 a share, said the person cited earlier.
