Representative image | Photo credit: PTI
- The board of directors approved the identification of strategic investors for StAR MF, there is no limit rate
- ESB had around 5cr accounts as of March 2020 and this number has increased to 7cr
- Differentiator: BSE is the only exchange in India that owns, maintains and operates most of its technology
BSE Ltd stock is up 45% year-to-date (in 2021) and has seen gains of nearly 134% in one year. The stock market posted good profits in the fourth quarter at around Rs 15cr. Covid has led to accelerated adoption of the technology and increased investor interest in stocks. There has also been great interest in the unlisted space with NSE commanding high valuations. ET NOW sat down with Ashishkumar Chauhan, Managing Director and CEO of ESB to learn more about future growth prospects and unlocking value in StAR MF.
In an exclusive interaction with ET NOW, Ashishkumar Chauhan, MD & CEO, BSE said, “The non-linearity in our business is very high, you need to have patience, work hard and evolve, in some ways the exchanges are a platform game, we are the technology providers to the exchanges today, we are the only exchange in India that owns, maintains and operates most of its technology which sets us apart from other exchanges. He said the BSE had around 5cr accounts in March 2020 and now that number has grown to 7cr which is a huge number. Zerodha, Upstox has played an important role, India is getting much deeper in the total number of investors and BSE sees investors from all zip codes in the country including Manipur, Meghalaya, Mizoram, Jammu, Srinagar, Ladakh and it is very encouraging.
Chauhan said that the board approved the identification of strategic investors and the definition of an appropriate structure for StAR MF, StAR MF has experienced profitable growth unlike other Fintechs which have high cash consumption. , our business is cash flow positive and very profitable with the marginal cost of running the business close to zero.
Speaking further on StAR MF and when can we expect value unlock in the business, Chauhan said, “BSE is a board-run company, gave the mandate to discuss and working with (possible) strategic partners, there is currently no obstacle rate…% of board members are candidates from the public… the wealth created by StAR MF for BSE will be for the Next 5 to 10 years and it is growing at a very rapid rate, we will respect the StAR MF board of directors ”
Chauhan believes that the valuations of a company are different when it is based in Bangalore than in Mumbai. He said: “StAR MF has been profitable for a few years, the marginal cost of running a business is close to zero, it is a very profitable business, we get money for every transaction and have 70,000 MF agents. direct and if we take larger distributors / brokers we are now 200,000+ agents distributing MF in India… we will reach 1cr SIP in the next 2 months ”.
BSE has a good track record and does not often have to raise funds, the costs are under control once the businesses in which BSE is starting to generate income. There are many subsidiaries, many ESB joint ventures, and Chauhan hopes to see great results for the many companies that ESB has built over the past 10 years.