Introduction
In our previous blog, we explored how BSE Ltd. (Bombay Stock Exchange) has evolved into a modern financial services powerhouse. With its FY25 performance shattering past records, many investors are now eyeing BSE not just as a stock exchange, but as a strategic holding company. In this second part, we focus on the hidden value behind BSE’s subsidiaries, the dividends it earns, and the value unlocked from its partial stake sale in CDSL.
If you’re seeking a low-debt, cash-generating business with exposure to the core infrastructure of India’s financial markets, BSE deserves a spot on your radar.
BSE’s Growing Empire: Subsidiaries and Strategic Investments
BSE has built a rich portfolio of subsidiaries and joint ventures across capital markets, insurance, commodities, power trading, and international markets. Here’s a breakdown:
🔹 100% Owned Subsidiaries
| Subsidiary | Description |
|---|---|
| India INX | India’s international exchange at GIFT City; allows global asset class access |
| BSE Investments Ltd. | Investment holding company |
| BSE Technologies Pvt. Ltd. | IT services arm for exchange tech solutions |
| BSE Administration & Supervision Ltd. | Handles SEBI-mandated supervision for MFDs |
| India International Exchange (IFSC) Ltd. | Enables trading in equity, debt, currencies, etc. globally |
| India International Clearing Corporation (IFSC) Ltd. | Clearing arm for India INX |
| BSE CSR Integrated Foundation | CSR initiative and compliance arm |
🔹 Key Strategic Stakes
| Entity | Stake | Sector |
|---|---|---|
| Central Depository Services (CDSL) | ~20% | Depository services |
| Ebix Insurance Broking & Insuretech | 40% | Digital insurance distribution |
| Hindustan Power Exchange (HPX) | 22.6% | Power trading |
| Asia Index Pvt. Ltd. | 50% | Index creation JV with S&P |
| ONDC | 4.85% | Open e-commerce network |
| BSE E-Agricultural Markets Ltd. | 26.09% | Agri-tech exchange platform |
BSE also divested its 100% stake in BSE Institute Ltd. (BIL) in May 2025 to AV Financial Experts Network to sharpen its focus on core financial infrastructure.
Massive Value Unlock: CDSL Stake Sale
BSE was the original promoter of CDSL, India’s second-largest depository. While it retains a significant ~20% stake, it partially monetized this holding in FY24:
- Stake sold: ~4.5% (exact stake value not disclosed in open filings)
- Gain from sale: ₹3,675 million booked in FY24 as an exceptional item
- Remaining value: BSE’s current ~20% stake is worth thousands of crores and continues to deliver consistent dividends
This strategic move unlocked value while retaining future upside, a classic “harvest-and-hold” strategy.
Dividend Income from Subsidiaries and Holdings
BSE is not just paying dividends to shareholders—it’s also earning dividends from its own investments:
- CDSL: As a profitable listed company, CDSL regularly pays dividends. BSE earned ₹651 million in FY25 as income from strategic holdings.
- Investment Income (Total): ₹2,547 million in FY25 from dividends, treasury, and deposits.
This inflow helps BSE maintain its own generous dividend policy:
🪙 Dividend Distribution (Standalone)
| Year | Dividend Paid (₹ Mn) |
|---|---|
| FY23 | ₹1,851 Mn |
| FY24 | ₹1,649 Mn |
| FY25 | ₹2,060 Mn (Highest ever) |
This translates to an impressive payout ratio of ~95–99%, which is rare for a growth-focused tech-enabled company.
Investment Takeaway
BSE is no longer just a stock exchange—it’s a strategic investment platform, benefiting from structural trends like:
- India’s rising demat base and MF inflows
- International expansion via GIFT City
- Surging options volumes in equity derivatives
- Regulatory tailwinds in digital distribution (MF, insurance, bonds)
- Monetizable holdings in CDSL, HPX, and Ebix
With a debt-free balance sheet, recurring income, consistent dividends, and strategic unlocks like the CDSL sale, BSE stock checks every box for a core long-term portfolio holding.
🔗 Outbound Links
#BSE #CDSL #DividendIncome #IndiaINX #Ebix #FinancialHolding #StockMarketIndia #PowerExchange #LongTermInvesting #FIREIndia #StrategicInvestments #BSEGroup
⚠️ Disclaimer:
This blog is for informational and educational purposes only and should not be construed as financial advice. Always consult a registered financial advisor before making investment decisions. The author may have holdings in the companies mentioned.
