Wednesday, February 15, 2012

MCX India IPO

Multi Commodity Exchange of India (MCX), country's largest commodity exchange, has come out with an IPO of 64.27 lakh equity shares (dilution of 12.6% post issue) for subscription. The offer comprises a net offer of 6,177,378 equity shares to the public and a reservation of up to 250,000 equity shares for the eligible employees. The issue consists of an offer for sale by Financial Technologies (India) Limited, State Bank of India, GLG Financials Fund, Alexandra Mauritius Limited, Corporation Bank, ICICI Lombard General Insurance Company Limited and Bank of Baroda.

MCX is a de-mutualised exchange and has received permanent recognition from the Government of India on September 26, 2003, to facilitate nationwide online trading, clearing and settlement operations of commodities futures transactions. The company offers trading in 49 commodity futures based on contract specifications, from a diverse range of classes including bullion, ferrous and non-ferrous metals, energy and agriculture. MCX is the fifth largest commodity futures exchange globally in terms of the number of contracts traded for the six months ended June 30, 2011.

The IPO opens on during 22 February, 2012 and closes on 24 February, 2012.  The company has set a price band of Rs 860 to Rs 1032 per share.

Financial Technologies will reduce its stake in MCX to 26% from 31.18% through the offer, SBI will cut its holding to 1.04% to 5.18%, Corporation Bank to 3% from 3.48% and Bank of Baroda to 0.82% from 1.03%. GLG Financials Fund will offload its stake to 0.38% from 1.92% and Alexandra Mauritius Limited to 0.19% from 0.96%.

Retail investors can invest up to a maximum of Rs 2,00,000 per application.

The book running lead managers for the issue are Edelweiss Financial Services Limited, Citigroup Global Markets India Private Limited and Morgan Stanley India Company Private Limited. Karvy Computershare Private Limited is the registrar of the issue.

Recommendation:
CRISIL has assigned grade 5 to the IPO indicating strong fundamentals. MCX is the first exchange in India to be listed is at a P/E of 18x at the upper price band of the IPO on annualized FY12E earnings with a 30% growth. The company has good growth prospects and shall offer good listing gains. We would recommend this IPO to investors.

Subscription:
MCX India IPO has got great response from investors and got over subscribed 54 times at the close of the IPO.

At the close of the IPO,
QII segment got subscribed 49.12 times
NII segment got subscribed 150.35 times
Retail segment got subscribed 24.14 times
Employee segment got subscribed 0.18 times

Allotment:
MCX India has fixed the IPO price at Rs 1032 per share. Click here to check MCX India IPO Allotment Status!

Listing:
MCX India IPO will get listed on 9th March, 2012. Analysts predicted listing between Rs 1350 to Rs 1400. The IPO opened up 38% at Rs 1,425 as against issue price of Rs 1,032 on the BSE, touched an intraday high of Rs 1,426 and an intraday low of Rs 1,282.10, before closing the day with gains of 25.68% or Rs 265.05 at Rs 1297.05 on the BSE.