BSE's 2011-12 net profit down 11.25% at Rs 205 cr

The Bombay Stock Exchange (BSE) on Saturday said its net profit declined by 11.25 per cent in 2011-12, as it spent more money on the market-making scheme to revive its equity derivative segment. Net profit stood at Rs 205 crore, compared to Rs 231 crore in 2010-11.

Diluted earnings per share were at Rs 16.85. The BSE board declared a dividend of Rs 6 per equity share of face value of Re1 each.

Revenue advanced to Rs 578 crore from 538 crore in the previous year. BSE operates in two segments — stock exchange activity, involving providing securities trading, and depository services. It earned Rs 190 crore from trading activity and Rs 95 crore from depository business. It owns a 51 per cent stake in Central Depository Services Ltd.

Since October, BSE has spent Rs 60.4 crore on the market-making scheme. Average daily derivative volumes stood at Rs 15,000 crore, giving the exchange a 15-20 per cent market share in the segment. The National Stock Exchange (NSE) sees average daily equity derivatives worth over Rs 100,000 crore. The BSE board had sanctioned Rs 107 crore for the market-making scheme.

Ashish Chauhan will take over as BSE’s interim chief executive officer (CEO) from next month, after current chief Madhu Kannan steps down. A team headed by BSE chairman S Ramadorai and HDFC’s Keki Mistry has been entrusted with the task of looking for a new CEO. Chauhan, a veteran in the exchange space, is a strong contender. BSE’s future hinges on its ability to develop a market for equity derivative products on its platform.