\\\'Fair value\\\' of BSE shares up 17.5pc over last year

MUMBAI, June 21 (Business Standard): The fair value of the shares of Asia's oldest stock exchange is up 17.49 per cent over the last year, even as earnings went up on lower expenses.

The share price has risen from Rs 139.06 to Rs 163.39 per share, according to a notice on the BSE website. The fair value is disseminated by the exchange to help brokers holding the shares to calculate their net worth.

"The exchange in order to have uniformity with regard to value of shares of BSE Ltd. based on the formula mentioned in the notice dated December 1, 2008 has determined the 'fair value' of shares, duly certified by the Auditor of the Exchange at Rs 163.39 per share.

This value can be taken into account by the trading members for the purpose of computation of their net worth as on March 31, 2014 and thereafter for the purpose of computation of net worth as on September 30 2014," said the notice on the BSE website.

Interestingly, the fair value is at a 20 per cent discount to the selling rate for BSE shares in off-market transactions. The selling price of BSE shares is Rs 197.5, according to estimates from two sources providing quotes for unlisted shares.

The fair value estimates are a conservative way of estimating share value. It is arrived at on the basis of the bourse's earnings and the sum of the values of its various businesses individually.

"It may be noted that the determination of the fair value is the average of earnings value of Rs 112 per share and break up value of Rs 214.77 per share as determined on the basis of the said notice," added the notice.