Mumbai: BSE Ltd, Asia’s oldest stock exchange, has analysts on its side ahead of an initial public offering (IPO) seeking to raise as much as Rs1,243.4 crore.
Stock market analysts say the valuation at which BSE is seeking to raise the money is reasonable compared to that of its only listed rival—the Multi Commodity Exchange of India (MCX).
BSE will sell shares in a price band of Rs805-806 in the three-day IPO that opens on Monday.
In a note to clients on Thursday, securities house IIFL Ltd said that at the upper end of the price band, BSE is selling stock at a price to earnings (P/E) multiple of 20.6 times fiscal year 2016-17 earnings. That compares with a P/E of around 40 times at which MCX is trading.
“We believe the valuation demanded by the company is justified and hence recommend a subscribe to the issue,” IIFL analyst Saurabh Rathi wrote in the note.
Meanwhile, in the grey market, the stock was quoting at a premium of Rs110-115 per share.
“I think valuations are decent, and they (BSE) will be able to maintain…