BSE A MUST FOR EVERY PORTFOLIO AND EVERY INVESTOR

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1 Company Update Financial Services India Research NVS Wealth Managers BSE Ltd. 2r CMP: 817 Nifty 10,615.7 Sensex 34,923.6 Nifty PE 26.5 Sensex PE 23.7 Stock Data Sector BSE Code NSE Code Financial Services NA BSE FV 2 Market Cap (Rs. Cr) 4,347 Market Cap (US$ mn) 658 Equity Share Cap Stock Performance (%) 52-week high/low Rs / 726 1M 6M 12M Absolute (%) 5.5% -17.2% -18.9% Shareholding Pattern (%) BSE CREATES HISTORY 1,800% DIVIDEND BONANZA BSE A MUST FOR EVERY PORTFOLIO AND EVERY INVESTOR We have been recommending BSE since even before the Company was listed on NSE in February Our investors have made multibagger returns on their investment over 7 years. For our Full IPO Report please visit : BSE today rewarded its shareholders with a bumper dividend of 1,800% (Rs. 36 per share) for FY2018 (Rs. 28 per Share for the Previous Year FY2017) offering an excellent tax free dividend yield of 4.4% at the CMP of Rs. 817 per Share. For FY2018 the consolidated topline was up by 13% to Rs. 699 Crs. (Rs. 618 Crs. in FY2017), EBITDA was up by 24% to Rs. 322 Crs. (Rs. 260 Crs.), PAT was up by 32% to Rs. 237 Crs. (Rs. 179 Crs.) and PAT including CDSL gains was up by whopping 222% to Rs. 711 Crs. (Rs. 221 Crs.) Q4FY2018 topline was up by 6% to Rs. 195 Crs. (Rs. 185 Crs. in Q4FY2017), EBITDA up by 23% to Rs. 85 Crs. (Rs. 69 Crs.) and PAT is up by 26% to Rs. 62 Crs. (Rs. 49 Crs.). BSE reported strong set of numbers on account of increase in revenue from security services, increase in exclusive listed stocks turnover, higher turnover from StAR MF platform, higher market share in currency derivatives and significant pickup in volunes at India International Exchange. BSE with a tiny share capital of Rs Crs., Debt Free status, Reserves and Surplus of over Rs. 3,100 Crs., Cash and Financial Assets of over Rs. 2,775 Crs., is having a consolidated EPS of Rs and is currently trading at a modest P/E multiple of little over 18 times at the CMP of 817 per share and P/BV multiple of mere 1.4 times (BVPS Rs. 589) making it the cheapest investment opportunity amongst the major exchanges in India Indian Energy Exchange Ltd., Multi Commodity Exchange of India Ltd. and National Stock Exchange of India Ltd. Sensex and stock movement We believe the Equity shares of BSE offers an excellent investment opportunity for all kinds of investors from Retail to HNI and Institutional to FPI and one can invest for all time horizons from Short to Long term to reap the benefits of rich dividends in years to come. Consolidated Financial Performance Particulars (Rs. in Crs.) Q4FY2018 Q4FY2017 Growth (%) FY2018 FY2017 Growth (%) Revenue % % EBITDA % % PBT % % PAT % % PAT % EPS th May, 2018 Eq. Share Cap Net Worth 3,134 2,953 BVPS PAT and EPS : excluding CDSL gain 2 PAT : including CDSL gain

2 I. BSE - THE COMPANY PROFILE AND BUSINESS VERTICALS BSE is the oldest Stock Exchange in Asia with a glorious history of over 140 years as well as the fastest Stock Exchange in the world. BSE is currently world's Number One Exchange in terms of the number of listed companies (over 5,825 Companies as on 31 st March, 2018). BSE is also Second largest globally in numbers of currency options traded with over 2.3 Crs. contracts traded and Tenth largest in terms of Market Capitalization of listed companies of over Rs. 150 Trillions as on date. BSE offers host of services through its platform such as Equity trading, Mutual Fund trading, Debentures & Bonds and Currency Derivatives. India s leading Stock Exchange BSE also plans to enter the Commodity Derivatives Market and has already applied for license to SEBI to launch the platform from 1 st October BSE has establish the country's first International Exchange at the International Financial Services Centre (IFSC), GIFT city - Gandhinagar. India International Exchange is a wholly owned subsidiary of BSE and it commenced its operations on 16 th January, Currently BSE has over 83% of the market share across all verticals in GIFT City. India International Exchange has one of the world s most advanced technology platforms with a turn-around time of as low as 4 microseconds. The India International Exchange is a pet project of our Prime Minister Shri Narendra Modi and it aims to emerge as leading international exchange and compete with other international financial centres such as Hong Kong, Singapore Dubai, London and New York. BSE has three major Revenue Business Models which are mentioned below

3 BSE marching ahead on all business fronts Equity Markets: BSE s average daily turnover in Equity markets has grown at a CAGR of 21% from Rs. 2,078 Crs. in FY2014 to Rs. 4,402 Crs. in FY2018. The Transaction charges income for BSE also grew at a whopping CAGR of 50% from Rs Crs. to Rs. 144 Crs. during the same period. Recently from March 2018 BSE has waived transaction charges on BSE S&P Sensex 30 Stocks in order to facilitate more trade and volumes in the same. Currency Derivatives: The average daily turnover grew at a CAGR of over 55% from Rs. 3,016 Crs. in FY2014 to Rs. 18,332 Crs. in FY2018. BSE has over 48% of the market share in currency derivatives segment in India. Interest Rate Futures: The average daily turnover of Interest Rate Futures have grown at a staggering CAGR of over 95% in last 5 years from Rs. 63 Crs. to Rs. 925 Crs. Even the average Daily Number of Contracts have grown at a similar CAGR of over 95% from 3,135 average daily contracts to 46,881 average daily contracts. BSE StAR MF: StAR MF is a flagship mutual fund distribution platform from BSE. The platform becomes India s first fully digital platform with an e-mandate facility. Total number of Mutual Fund schemes available as on 31 st March, 2018 StAR MF stands at 8,215 schemes across 38 MF AMC. Total turnover grew at a CAGR of over 110% from Rs. 5,596 Crs. in FY2014 to Rs. 1,17,824 Crs. in FY2018. Total number of orders processed grew from 5,84,453 orders in FY2014 (average monthly volume of 48,705) to 1,70,30,445 in FY2018 (average monthly volume of over 1.4 Millions). BSE StAR MF has recently introduced an average fee of Rs. 5 per transaction and that would contribute substantially to its topline and profitability in years to come. BSE SME: BSE commands a whopping 63% market share in the SME listing space with over 235 companies currently listed on the BSE SME platform against 140 Companies listed on NSE Emerge platform. A total of 46 Companies migrated to main board from SME platform in FY2018 against a total of 25 companies in FY2017. India International Exchange at GIFT City: Various asset classes and contracts such as Index Derivates, Indian Stock Futures, Global Stock Futures, Commodity Futures and Currency Derivatives are traded at India International Exchange. The average daily traded value has substantially increased in last six months from USD 39 Mn in October 2017 to USD 242 Mn in March II. BSE TOP TEN SHAREHOLDERS AS ON 31 st MARCH, 2018 Sr. No. Key Shareholders Total No. of Shares Shareholding (%) 1 Deutsche Boerse AG 25,49, % 2 State Bank of India 25,49, % 3 LIC 25,25, % 4 IDFC Group 14,81, % 5 Siddharth Balachandran 13,39, % 6 GKFF Ventures 12,28, % 7 Caldwell India Holding Inc. 11,73, % 8 Jupiter India Fund 10,87, % 9 Acacia Banyan Partners Limited 10,07, % 10 Bajaj Holdings & Investment Ltd. 7,51, % BSE Equity Share Capital is well placed amongst little over 1,75,000 shareholders as on 31 st March, 2018.

4 III. BSE ROBUST DIVIDEND HISTORY AT A GLANCE BSE allotted 10,000 Equity Shares at Re. 1 each at par to all the members in at the time of demutualization and Corporatization. Subsequently BSE declared a liberal bonus of 12 Equity shares for every 1 held in the year Thus all members had 1,30,000 Equity Shares in their portfolio with a original investment of mere Rs. 10,000. Since 2007 BSE member shareholders received a whopping dividend income of Rs. 94,65,000 alone in last 12 years since corporatization of the Exchange. Year Face Value No. of Shares Dividend (Rs.) Dividend (%) Amount (Rs.) , , ,000% 3,00, ,30, % 5,20, ,30, % 5,20, ,30, % 5,20, ,30, % 7,80, ,30, % 5,20, ,30, % 5,20, ,30, % 6,50, , % 9,75, , ,400% 18,20, , ,800% 23,40,000 Total ,65,000 1 Bonus was issued by BSE in the ratio of 12 Equity Shares for every 1 Equity Share held in March The Face Value was consolidated from Re. 1 per Equity Shares into Rs. 2 per Equity Shares. IV. BSE DEMAND DRIVERS Gift City Wholly Owned Subsidiary of BSE: India International Exchange operating for 22 hours a day caters to all the global markets right from Tokyo to Chicago. BSE StAR MF: With growth in total investor population and the paradigm shift in investor preference for financial assets over physical assets would increase the percentage of equity savings to financial savings in India. India International Exchange at GIFT city - Gandhinagar caters to host of Indian and International asset classes. With extensive trading hours, non levy of Capital Gains to Non Residents, listing of securities from across the globe, appropriate fees structure and with more asset class to be added to the product basket in coming months would result in fuelling the topline and the profitability of BSE. BSE StAR MF platform has introduced an average fee of Rs. 5 per transaction on its platform. Even after the introduction of these charges it has seen an upsurge in the number of applications received through this platform due to the ease of operations. Total number of orders processed grew from 5,84,453 orders in FY2014 (average monthly volume of 48,705) to 1,70,30,445 in FY2018 (average monthly volume of over 1.4 Million). With investors now preferring to invest more in Mutual Funds rather than investing in physical assets, would auger well for the StAR MF Platform of BSE.

5 BSE all set to launch Commodity Derivatives: In line with the recent Commodities Derivatives announcement, BSE s MD and CEO, Mr. Ashish Chauhan in his recent interview with Business Line dated 7 th May, 2018 remarked, The BSE will begin trading in commodity derivatives from October 1. He further remarked, We will start with non-agriculture commodities like metals, energy and base metals. We have applied (to SEBI) for non-agri commodities. GDP growth to propel BSE into a new orbit: As the Market Capitalization to GDP ratio increases even to a global level of 99% there is no looking back for BSE. BSE to enable its members into Insurance Broking: BSE and EBIX have set up a joint venture - BSE EBIX Insurance Broking Pvt. Ltd. As the penetration of Insurance in India increases even to a global level of 6-7% there is no looking back for BSE. BSE is all ready to launch its ambitious project Commodity Derivatives from October 2018 as per the SEBI guidelines. Once the trading commences it would add tremendous business potential for BSE and would grow its existing product portfolio and significantly bolster its embedded value for the stakeholders. India s Market Capitalization to GDP ratio currently stands at 69% compared to world average of 99%. With growth in earnings in equity markets this ratio is bound to get narrow in coming years and is expected to increase to pre 2008 financial crisis levels. As the Market Capitalization to GDP ratio increases even to a global level of 99% and BRICS of 110% there is no looking back for BSE. Indian retail investors have historically preferred physical assets but that is changing with increasing financial awareness. India s equity savings as a percentage of financial savings is substantially lower than other countries. With growth in total population, growth in level of education, introduction of more asset class, GDP growing at a rate of approximately 7.3%, potential easing of restriction of FIIs trading in currency futures and introduction of other global commodities for trading would increase the percentage of equity savings to financial savings in India. India still has a long way to go as compared to other international markets such as China (14%), Brazil (15%), Indonesia (20%) and USA (42%). BSE and EBIX have set up a joint venture - BSE EBIX Insurance Broking Pvt. Ltd. to develop a pioneering insurance distribution network in India with the goal of revolutionizing end-to-end sales and processing of Insurance in the India. With total insurance penetration (Life and Non Life Insurance) at mere 4% and with Life and Non Life Insurance market growing at a CAGR of around 12% and 11% there is a huge scope for BSE to tap the untapped market. As the penetration of Insurance in India increases even to a global level of 6-7% there is no looking back for BSE.

6 V. BSE - CONSOLIDATED FINANCIAL PERFORMANCE AT A GLANCE Particulars (Rs. in Crs.) FY14 FY15 FY16 FY17 FY18 Total Income EBITDA PAT (Excl. CDSL Gain) PAT (Incl. CDSL Gain) NA NA NA EPS (Excl. CDSL Gain) Face Value Equity Share Capital Networth 2,371 2,461 2,449 2,662 3,134 BVPS Ratios EBITDA (%) 54% 49% 46% 42% 46% PAT (%) (Excl. CDSL Gain) 26% 21% 19% 29% 34% Average Daily Turnover (Equity) 2,078 3,518 2,996 4,025 4,402 Transaction Charges Income (Equity) Average Daily Turnover (Currency Derivatives) 3,016 8,019 11,421 13,106 18,332 Average Daily Contracts (Currency Derivatives) 483,422 1,299,059 1,736,473 1,943,906 2,847,062 Average Daily Turnover (Interest Rate Futures) Average Daily Contracts (Interest Rate Futures) 3,135 8,543 23,503 25,559 46,881 Total Turnover (Mutual Funds) 5,596 10,494 44,235 74, ,824 Total Number of orders (Mutual Funds) 5,84,453 15,87,735 32,80,067 64,83,468 1,70,30,445 Listing Fees Securities Listed 5,336 5,624 5,911 5,834 5,629 Listing Fees (SME) No. of Companies Listed (SME) The Face Value was consolidated from Re. 1 per Equity Shares into Rs. 2 per Equity Shares. Exhibit 1- Net Income Exhibit 2- EBITDA NET INCOME EBITDA FY14 FY15 FY16 FY17 FY18 0 FY14 FY15 FY16 FY17 FY18

7 Critical Analysis The Topline grew from Rs. 530 Crs. in FY2014 to Rs. 699 Crs. in FY2018 and PAT increased at a CAGR of 15.1% from Rs. 135 Crs. to Rs. 237 Crs. (excluding CDSL gain) during the same period. BSE is lagging behind in market share in Equity Cash Segment, though it is emerging as market leader in many new segments such as StAR MF, Currency Derivatives (Market Share 48%), BSE SME (Market Share 63%), India International Exchange (Market Share 83%) we strongly believe that BSE will bounce back to gain its due share in the Equity Cash Segment in times to come with innovative measures. Average Daily Traded value at India International Exchange has increased substantially over last 6 months from USD 39 Million in October 2017 to over USD 240 Million in March With more asset classes to be introduced we expect this trend to continue and grow in months to come. Total Turnover on the StAR MF platform was up by 59% to Rs. 1,17,824 Crs. against Rs. 74,301 Crs. in FY2017. BSE is currently tied up with around 38 AMC and has over 8,200 schemes available as on 31 st March, BSE has introduced an average fee of Rs. 5 per transaction on its platform which would significantly bolster its earnings in coming years. The Company is a debt free Company with Reserves and Surplus of over Rs. 3,100 Crs., and Cash and Financial Assets of over Rs. 2,775 Crs BSE has historically rewarded its shareholders with a very liberal dividends year after year. BSE today rewarded its shareholders with a bumper dividend of 1,800% (Rs. 36 per share) for FY2018 (Rs. 28 oer Share for the Previous Year FY2017) offering an excellent tax free dividend yield of 4.4% at the CMP of Rs. 817 per Share. Since 2007 BSE member shareholders received a whopping dividend income of Rs. 94,65,000 alone in last 12 years since corporatization of the Exchange. VI. BSE PEER COMPARISION (FY2018) Particulars (Rs. in Crs.) BSE NSE MCX IEX Total Income 699 3, EBITDA 322 2, PAT 237 1, EPS Face Value Equity Share Capital Networth 3,134 7,350 1, BVPS Dividend Payout (%) 1,800% 1,475% 170% 220% Ratios EBITDA (%) 46% 73% 47% 82% PAT (%) 34% 48% 31% 51% Valuation Ratios P/E P/BV Market Capitalization / Sales As NSE is unlisted we have assumed a price of Rs. 925 per share for calculating all the valuation ratios.

8 At the CMP of Rs. 817 the Stock is trading at a P/E multiple of 18.7 times its FY2018 EPS of Rs and P/BV multiple of mere 1.4 times. We believe that BSE is attractively valued and is currently available at a huge discount to other listed Exchanges such as MCX (P/E : 35x and P/BV : 2.8x), NSE (P/E : 31x and P/BV : 6.3x) and IEX (P/E : 34xand P/BV : 16.7x). It is interesting to note that BSE offers its shareholders highest dividend payout at whopping 1,800% as against 1,475% by NSE, 220% by IEX and mere 170% by MCX. Even when we compare dividend yield amongst all the peers, BSE offers an excellent tax free dividend yield of 4.4% as against 2.2% by MCX, 1.6% by NSE and 1.4% by IEX. BSE has the smallest Share Capital of Rs Crs. with huge Net Worth of Rs. 3,134 Crs. next only to NSE. Market Capitalization/Sales multiple is 6.2 times and compared to its peers which is at 15.1 times in case of NSE, 11.1 times of MCX and 18.8 times of IEX. VII. Valuation & Recommendation BSE had touched an all time high of Rs. 1,178 per share on 14 th July, 2017 (little over Rs. 6,337 Crs. in Market Capitalization) subsequently the stock saw corrections of around 38% and touched a low of 726 on 23 rd March, 2018 (Rs. 3,906 Crs. Market Capitalization) thereafter the stock recovered to its current levels. BSE at CMP is trading at a P/E Multiple of 18.7 times its FY2018 EPS of Rs A MUST ACCUMULATE FOR ALL INVESTOR. It would be interesting to note that MCX and IEX two of its listed peers are trading at a P/E multiple of 35.2 times and 34.2 times respectively, INDICATING BSE HAS A STRONG POTENTIAL FOR CAPITAL APPRECIATION FROM THE PRESENT LEVEL. The highest P/E multiple is commanded by MCX at 35.2 times and the highest P/BV multiple is commanded by IEX at 16.7 times. Only if BSE was to command such a valuation as its peers any time in future, the price of BSE Shares at 35.2 P/E multiple should be Rs. 1,542 per share and at a 16.7 P/BV multiple BSE should have a price of Rs. 9,836 per share. BSE has historically been a hefty dividend paying company with an exceptional track record. With a mammoth Dividend Payout of 1,800% for FY2018 it again proves that BSE is A MUST INVESTMENT FOR ALL KINDS OF INVESTORS WITH ALL TIME HORIZONS. With tremendeous growth in the embedded value, huge net cash reserve, high dividend yield, introduction of more asset class, GDP growing at a rate of approximately 7.3%, potential easing of restriction of FIIs trading in currency futures, commencement of trading in Commodity Derivatives from October 2018, StAR MF growing at exceptional pace, introduction of more global commodities for trading would benefit BSE in years to come. A Comparision of the financial and stock market performance with its peers like MCX, IEX and NSE, we believe BSE has huge potential to reward its investors with strong performance and bumper dividends in years to come. We believe the Equity shares of BSE offers an excellent investment opportunity for all kinds of investors from Retail to HNI and Institutional to FPI and one can invest for all time horizons from Short to Long term to reap the benefits of rich dividends in years to come.

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