BSE- to the 🌙

What a run this stock has had over the past week- up well over 40%! It’s up over 80% in less than two months and of course, with the hype in media, we all know that it’s the most buzzing stock of the moment.

I have been a perma-Bull on the stock, not from yesterday but ever since I discovered it in 2018. So what is that I am now trying to convey which I have not yet said multiple times over.

First of all, this is a loud scream to say that it’s the biggest stock since the Covid lows, up over 44x from the now adjusted price of Rs. 75. 

So today I am trying to gauge what’s lying ahead of us and how the market will play out the FOMO in the stock.

BSE, as I have said earlier is on track to do well over a 1000crore PAT this year with a revenue of roughly 2500crores. Even at current levels of trading, it is poised to grow the revenue multifold over the next two-three years and in no time, by FY2027-28, it should be a 5000crore revenue company at the very least with close to 2500 crore PAT. With the kind of multiple expansion which generally follows in such stories, it will command the valutation a Dixon or a Trent does and the very early signs of that were witnessed this week.

This week was an indication that the PMS type, the HNIs are getting restless and are finally throwing in the towel and buying the stock. One Amit Jeswani who jumps around on TV with a lot of such fancy names gave a five minute pep talk about the virtues of the stock and how the stock will make so much money and then confessed that he bought it at 3400! That was on Tuesday.

This is the point I am trying to convey- retailers have already made 5-10 times their money in the stock and the biggies are just about to get in. FOMO in stock market is the biggest wealth creator for long term investors. These people who claim to be the greatest investors can’t embarrass themselves by admitting that they missed out on a stock which is 40x since Covid, 10x since March 2023 and up 40% in a week! So now they will fall over each others to buy some quantity and run on CNBC claiming that they have discovered BSE!

Just the way that Ramdeo Agarwal still claims to have discovered Hero and Bharti. So the thing is, BSE is most likely going to be the stock of the decade- the poster boy of the rise and rise of Indian Capital Markets- eloquently capturing the power of Indian retailers. And all these funds managers who in my mind are nothing but momentum chasers will sell their kidneys to claim that they have always been the first to discover BSE!

This is that moment when the gush starts!

Imagine the bell ringing before the flood-gates open in a dam. After some time, the flow of the water takes control of itself and everything else. This move from 3000 to 4000 in a week is that moment when BSE has joined that league of stocks which were seriously missed by the big boys.

Imagine Tesla in 2020 or Jockey in 2010 or even Bajaj Finance in 2015. Once the big money gets in, there is no looking back because all these people will redo their models to add BSE’s past performance to claim, of course falsely that their funds have always been the best performers. This is how the game is played and all I can tell you guys is that every single share of BSE is going to be worth its weight in 24 carat gold. 

Let me add one more point. The float of BSE is very limited- there are only 13.5 crore shares of the stock. So once people begin to buy and hold, a smaller additional demand results in greater price movement on the upside. This was visible in Nestle, OFSS, Jockey, Eicher and so on. So every share you have and are not selling is a share less available for someone else to buy. That pushes the price up each time there is additional demand.

Now the thing is, most of these fund managers are over 1000-5000crore types. So even if they have to add 1% of their portfolio to BSE, they’ll buy close to 50 crore of BSE shares. That is roughly 12 lakh shares at this price. And when the price moves up, they are compelled to add more because relative to the market, it’s performing even better. And thus, the shares vanish from the market and the price moves in a parabolic trajectory.

If you don’t trust me, go see how a mega cap like Apple or Amazon or Nvidea over up 20-30x in two-three years. BSE is still just at $6 Billion market cap.

With the kind of PAT coming in, it won’t be a big deal if it’s $20B by the end of this decade. 

So I can only say one thing- hold on to your shares, let someone else take credit on TV. It doesn’t matter to me because as long as the price moves up, I am making real money! 

Disclaimer- The views expressed in this blog are personal opinions and are shared for educational and informational purposes only. They should not be considered as financial, investment, or legal advice. I write primarily to document my own learning and thinking process. I am not a SEBI-registered investment adviser, research analyst, or financial influencer, and no part of this blog should be seen as a recommendation to buy, sell, or hold any security. Please do your own research or consult a qualified professional before making any financial decisions.