This Capital Market stock which deals in the business of providing services related to the market for trading in equity, currencies, derivatives, debt instruments, and mutual funds, earns from a variety of sources. In this article, we will look at BSE’s business, its financials, its shareholding pattern and learn how it makes money.
Price Movement
In Friday’s trading session, BSE Ltd‘s share price closed at Rs. 5,745 per equity share which is 3.59 percent lower than the previous closing price of Rs. 5,959.15 per share.
In the past year, the stock has delivered a multi-bagger return of around 159 percent and has underperformed the Nifty Index.
An Investment Bank betting on Exchange during critical times?
Recently, a prominent investment bank named Goldman Sachs purchased a 0.54 percent stake for a price of Rs. 5,786 per share valued at Rs. 401 crore on 19th February 2025.
Business Mix
The company recognises its operational revenue from Facilitating Trading in Securities and other related ancillary services as its sole segment for Q3FY25.
In the latest December 2024 quarter, the company showcased its operational revenue segments and their contribution to the top line. The segments are as follows: Transaction Charges – 66.07 percent, Treasury Income on Clearing and Settlement Funds – 6.27 percent, Services to Corporations – 19.39 percent, and other operating revenue (data dissemination fee, trading income, software income, etc) – 8.27 percent.
Q3FY25 Financial Performance
Their Q3FY25 results show revenue from operations of Rs. 832 crore which increased by 95.30 percent year on year, from Rs. 426 crore in Q3FY24. Its net profit increased by 106.60 percent year on year, from Rs. 106 crores in Q3FY24 to Rs. 219 crores in Q3FY25.
The Operating EBITDA margin including & excluding Core SGF is 31 and 56 percent respectively. The Net Profit stood at 26 percent for the December 2024.
What is the Core Settlement Guarantee Fund in the P&L?
There is an item known as Core Settlement Guarantee Fund (Core SGF) which is a SEBI rule for each SE (Recognised Stock Exchange) to maintain a fund to guarantee the trade settlements executed in its respective stock exchanges segment (Equity, Equity Derivatives, Currency Derivatives, Debt, Commodity Derivatives, Electronic Gold Receipts & Additional Contribution).
The Purpose is to step in when there is a trade shortfall or default by either (the buyer or seller) parties.
For the recent December 2024 quarter, the Core SGF was Rs. 199 crore which is around 35 percent of the total operating expenses.
Out of which Rs. 147 crore is paid by Indian Clearing Corporation Limited (ICCL) and the remaining Rs. 52 crore is contributed by BSE. The fund contribution from BSE is determined based on the trading activity on the exchange. The contribution is to be assessed by ICCL and BSE based on the risks.
Shareholding Pattern
As of December 2024, Foreign Institutional Investors (FII) held around 16.03 percent, followed by Domestic Institutional Investors (DII) held 12.07 percent and the Public held around 50 percent of BSE.
Ace Investor Mukul Mahavir Agrawal held around 1.33 percent of the stake in the exchange.
About the company
The Bombay Stock Exchange (BSE) was established in 1875 in Mumbai and is acclaimed as Asia’s oldest stock exchange. In the exchange there are over 6,000 companies and they facilitate trading in equities, derivatives, and mutual funds.
Written by Santhosh S
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