Riding high on a robust demand from retail investors with bids worth over Rs 1,400 crore,the Initial Public Offer of leading commodity bourse MCX was over-subscribed by 4.5 times on its second day today.
At the end of the second day of bidding,the first ever IPO by an Indian exchange got bids worth about Rs 2,500 crore,more than half of which came from retail investors and the rest from institutional investors and others,including HNIs.
The shares reserved for the retail investors was over-subscribed seven times,while bids from institutional investors and HNIs (High Networth Individuals) were 3.7 times and 1.9 times,respectively,of the reserved portions.
The bidding would continue till tomorrow.
Multi-Commodity Exchange (MCX),the country’s largest commodity exchange and the fifth biggest globally,is looking to raise up to Rs 663 crore through sale of about 64.27 lakh shares,out of which over 9 lakh shares have been already allocated to anchor investors for about Rs 100 crore.
The remainder of about 55 lakh are being sold through 100 per cent book-building process and bids have already come in for about 2.46 crore shares,which is 4.48 times of the offer.
Investment bankers said that most of the bids are coming at the top-end of the prescribed price band of Rs 860-1,032 per share,valuing the total bids at about Rs 2,500 crore.
The offer has so far attracted bids for nearly 1.5 crore shares from retail investors,while qualified institutional investors have bid for about 80 lakh shares.
Typically,the demand is higher from institutional investors in initial part of the bidding,while retail investors follow the suit in the latter part. Bucking this trend,the retail portion of the MCX IPO got over-subscribed on the first day itself and continues to drive the demand.
The retail as well as institutional demand is expected to accelerate further tomorrow,investment bankers tracking the offer said,adding that the IPO should get over-subscribed multiple times by the end of the bidding. The analysts say that the first-ever public offer by an Indian bourse is also expected to bring to halt a long-running lull period in the primary market,which has remained mostly weak for many months now.
“It marks the revival of the IPO market and it is good to see a quality and credible company in the market after a long time. Secondary market momentum is also helping the company’s issue and there are very good chance that the success of this
IPO will spill over and result into some more initial share sales,” SMC’s Jagannadham Thunuguntla said.
The promoters FTIL currently holds 31.2 per cent in MCX,which would come down to about 26 per cent after the IPO.
FTIL,SBI,Bank of Baroda,GLF Financials Fund,Alexandra Mauritius Ltd,Corporation Bank and ICICI Lombard General
Insurance are the investors divesting part of their holdings in MCX through the public offer.