BSE Ltd., the stock exchange based in India, is set for its best weekly performance ever, with shares rising by around 38% this week. Investors are betting on a potential IPO listing of the National Stock Exchange (NSE), BSE’s main competitor, following the resolution of a legal issue with regulators.
On Friday, BSE shares rose by up to 9% in Mumbai’s trading market. The excitement around NSE’s potential IPO is growing because, under Indian regulations, NSE cannot list itself and must use BSE’s platform to go public. If NSE, valued between ₹3-4 trillion, lists on BSE, it could significantly boost trading volumes and market share for BSE.
Abhay Agarwal, founder of Piper Serica Advisors Pvt., mentioned that NSE could go public within the next year, which is driving optimism among investors.
NSE is the world’s largest derivatives exchange based on contracts traded. Its public listing has been delayed for several years due to investigations, including a case where NSE was accused of giving special trading access to certain high-frequency firms. Recently, the Securities and Exchange Board of India (SEBI) cleared NSE and some of its former executives of wrongdoing in this case.
So far this year, BSE shares have jumped about 80%, making it one of the most expensive stock exchanges in the world, with a valuation of 48 times its one-year forward earnings.
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