BSE Limited: history, ownership, mission, how it works & makes money

A Brief History of BSE Limited

BSE Limited, formerly known as Bombay Stock Exchange, is Asia's oldest stock exchange, founded in 1875. It began as a small group of 318 intermediaries operating from a coffee shop in Bombay and has evolved into one of the world's leading stock exchanges.

Over the decades, BSE has introduced numerous pioneering initiatives, including the first screen-based trading system in 1995, which significantly enhanced transaction efficiency. In 2002, it became the first stock exchange in India to be recognized as a public limited company.

Key Milestones

• 1990: The index, SENSEX, was launched, representing the top 30 companies listed on BSE.
• 2005: The launch of the Derivatives Segment allowed for the trading of futures and options.
• 2017: BSE became the first stock exchange in India to get listed on its own platform.
• 2021: Reached the milestone of over 6,000 listed companies.

Financial Performance

As of October 2023, BSE's market capitalization stood at approximately INR 5.76 trillion (around USD 70 billion). The exchange recorded an average daily turnover of INR 12,000 crores (around USD 1.5 billion). The BSE Sensex closed at 66,000 points, having shown a remarkable increase of 18% over the past year.

Technological Advancements

Recently, BSE has adopted various technological solutions to enhance trading efficiency. The introduction of its BSE Cloud platform in 2022 facilitated seamless integration for market participants. Additionally, BSE has ventured into blockchain technology, exploring the issuance of digital securities.

Global Positioning

BSE has established a strong international presence. It has formed collaborations with various global exchanges, increasing its visibility. As a result, BSE is considered the gateway for foreign investments into India, with foreign institutional investments accounting for over 40% of the total market capitalization.

In 2022, BSE also launched an international exchange, India INX, situated in the Gujarat International Finance Tec-City (GIFT City), aimed at attracting global investors seeking to trade in Indian stocks.

BSE continues to play a pivotal role in India's economic development, contributing significantly to the growth of capital markets and the overall financial ecosystem.

A Who Owns BSE Limited

BSE Limited, formerly known as Bombay Stock Exchange, is one of the largest and oldest stock exchanges in Asia. As of the latest data available, BSE Limited is publicly traded under the ticker symbol BSE on its own platform. The ownership structure of BSE Limited consists of a mix of institutional, retail, and individual shareholders.

As of the fiscal year ending March 2023, the major shareholders include:

As per the financial filings, BSE Limited reported total equity of approximately ₹ 1,200 crore for FY 2022-2023. The company’s market capitalization as of October 2023 stood at around ₹ 6,500 crore.

In terms of financial performance, BSE Limited achieved a consolidated total income of ₹ 1,118 crore in FY 2022-2023, reflecting a year-on-year growth of 15%. The net profit after tax reported for the same period was approximately ₹ 450 crore, translating to a net profit margin of 40%.

BSE's major revenue streams include transaction fees, listing fees, and services to issuers. The transactions on BSE have seen a significant rise, with an average daily turnover of around ₹ 75,000 crore in the equity segment for FY 2022-2023.

Institutional ownership has grown considerably, with foreign investors increasing their stake in the company. The top five institutional shareholders include:

The governance of BSE Limited is led by an experienced board. The largest individual shareholders also include notable business figures and institutional representatives. Transparency in operations remains a key focus, driving investor confidence.

As of October 2023, the liquidity of BSE shares on the market remains robust, with an average trading volume of approximately 50,000 shares per day. This reflects a healthy interest from both domestic and foreign investors.

BSE Limited Mission Statement

BSE Limited, also known as the Bombay Stock Exchange, has a mission statement that emphasizes its commitment to creating a transparent and efficient marketplace for investors and listed companies. The organization's core mission is to foster confidence among investors, enhance market infrastructure, and promote the growth of the Indian securities market.

As of the latest report, BSE is the largest exchange in Asia in terms of the number of listed companies, boasting approximately 5,800 companies listed as of October 2023.

BSE aims to strengthen its position as the premier exchange in India, focusing on the following key areas:

• Enhancing customer experience and satisfaction.
• Leveraging technology for efficient trading systems.
• Providing comprehensive education to investors.
• Expanding the range of financial instruments offered.

Financially, BSE has reported a significant growth trajectory. For the fiscal year ending March 2023, BSE recorded revenue of approximately INR 1,643 crore, marking an increase of 18% compared to the previous year. The net profit stood at around INR 685 crore, an increase of 20%.

BSE also emphasizes sustainable growth, which is evident through its multiple initiatives aimed at improving market access and introducing new products such as Exchange-Traded Funds (ETFs) and commodities trading.

The exchange operates with a strong emphasis on innovation, which is reflected in its comprehensive trading platform that facilitates over 50 million trades monthly. The market capitalization of BSE as of October 2023 is approximately INR 40 trillion, making it one of the largest stock exchanges in the world.

In addition to its financial performance, BSE is committed to social responsibility, engaging in various initiatives that aim to educate investors and promote financial literacy throughout India.

Through these strategies, BSE Limited continuously works towards fulfilling its mission of providing a fair, secure, and transparent marketplace while contributing positively to the economy and society. The organization is dedicated to maintaining high standards of corporate governance and operational transparency, which are cornerstones of its mission statement.

How BSE Limited Works

BSE Limited, established in 1875, is Asia's oldest stock exchange. As of October 2023, it operates a fully automated electronic trading platform, facilitating stock trading for over 6,000 listed companies. This exchange plays a critical role in the Indian financial market, providing liquidity and enabling efficient price discovery.

The BSE's significant indices include the SENSEX, which comprises 30 of the largest and most actively traded stocks. The SENSEX had a closing value of 66,351.09 points on September 30, 2023, reflecting a year-to-date increase of approximately 9.5%.

The BSE operates under strict regulatory frameworks, overseen by the Securities and Exchange Board of India (SEBI). This ensures transparency and protects the interests of investors. The BSE offers a range of securities, including equities, debt instruments, derivatives, and mutual funds.

In terms of trading volume, BSE reported an average daily turnover of around INR 1.5 trillion in equity segments as of Q3 2023. The exchange also allows for derivatives trading, with a reported average daily turnover of about INR 800 billion.

Trading on the BSE is conducted from 9:15 AM to 3:30 PM (IST) on weekdays, with a pre-opening session from 9:00 AM to 9:15 AM. The BSE has also implemented various trading mechanisms, including market orders, limit orders, and stop-loss orders, allowing investors to tailor their trading strategies effectively.

The BSE has developed a diverse range of products such as Exchange Traded Funds (ETFs), and in 2023 introduced new derivatives contracts to attract more retail investors. The exchange reported that institutional investors accounted for approximately 42% of the trading volume, highlighting its attractiveness to both domestic and foreign institutional investors.

Additionally, BSE plays a key role in capital raising for companies. In FY 2023, the BSE facilitated Initial Public Offerings (IPOs) raising a total of approximately INR 250 billion, underscoring its function as a primary market for companies looking to tap into public capital.

The BSE's technological infrastructure is crucial for its operations, with T+2 settlement cycles ensuring that trades are settled two business days after execution. This efficiency enhances investor confidence in trading on the exchange.

Recent initiatives include the BSE SME platform, which aims to support small and medium enterprises. As of October 2023, this platform hosts over 400 companies, offering them access to equity capital while providing investors exposure to emerging businesses.

How BSE Limited Makes Money

BSE Limited, formerly known as Bombay Stock Exchange, is one of the leading stock exchanges in Asia. Its revenue model primarily hinges on transaction fees, listing fees, and various services it offers to market participants. Here’s a deeper look at the components of BSE’s revenue generation.

1. Transaction Fees

Transaction fees are the primary source of revenue for BSE. These fees are charged for every trade executed on the exchange. For the financial year 2022-2023, BSE reported total transaction fees of approximately ₹1,300 crore.

2. Listing Fees

BSE charges companies a listing fee when they get listed on the exchange. In FY 2022-2023, the exchange generated ₹130 crore from listing fees as companies sought access to the capital markets to raise funds.

3. Data and Information Services

BSE provides market data, which is another significant revenue stream. The exchange charges fees for access to its comprehensive data services. In FY 2022-2023, revenue from data services reached ₹100 crore.

4. Membership Fees

The exchange collects subscription fees from its members. The fees vary based on the type of membership and services availed. BSE earned ₹30 crore in membership fees during the same financial year.

5. Other Services

BSE extends several ancillary services, including clearing and settlement services, which contribute to its overall revenue. In FY 2022-2023, income from these services amounted to approximately ₹40 crore.

6. Investments and Interest Income

BSE also derives income from its investment portfolio. As of March 2023, BSE’s investment income amounted to ₹150 crore, contributing to its overall financial stability.

Overall, BSE Limited's business strategy focuses on diversifying its revenue streams while maintaining a strong market presence. The combination of transaction fees, listing fees, and value-added services allows it to sustain robust financial performance amidst a dynamic market landscape.