Riding high on a record-breaking demand from retail,institutional and HNI investors,the Initial Public Offer (IPO) of the country’s top commodity bourse MCX got over-subscribed by about 54 times today as it attracted bids worth about Rs 35,000 crore.
The first ever public offer by an Indian exchange has also emerged as the most successful IPO in about four years.
In terms of demand from retail investors,the MCX IPO is believed to have surpassed all previous records,as the shares reserved for the retail shareholders was over-subscribed nearly 24 times — higher than any public offer so far.
Overall,the MCX IPO,which happens to be the first for the year 2012,got subscribed by 53.9 times on the last day of bidding — thus attracting the highest over-subscription level since Anil Ambani-led Reliance group’s R-Power IPO in January 2008,which was subscribed nearly 73 times.
So far,the Mundra Port & SEZ IPO in November 2007 is the most subscribed IPO of Indian market at 115 times,while MCX is probably the third most over-subscribed public offer in the Indian capital market’s history.
The over-subscription level for retail segment was,however,lower at about 14 per cent in both R-Power and Mundra Port IPOs. In the HNI segment also,the demand for MCX IPO at 150 times is only next to R-Power’s 190 times.
The portion reserved for institutional investors in MCX IPO has got over-subscribed 50 times,while the HNIs (High Networth Individual Investors) have submitted bids for over 150 times of the number of shares reserved for them.
The last highly successful IPO was of Coal India in October 2010,which got subscribed 15 times overall,but the retail portion was subscribed only about two times.
The shares are alloted on the basis of subscription levels in different segments after all the bids are received.
The bidding for the MCX IPO began on February 22 and closed today in a price band of Rs 860-1,032 per share,which could raise Rs 663 crore at the top end of the price-band.
Out of this,shares worth nearly Rs 100 crore have already been allocated to 12 anchor investors and the remainder of about 55 lakh shares are being sold to the public investors.
However,it has attracted bids for nearly 30 crore shares,creating demand worth about Rs 35,000 crore.
Investment bankers said that the applications were coming in even after the end of the scheduled bidding period at 5 pm and they have sought extension of time till late in evening for acceptance of bids.
Post its listing,MCX could have lakhs of retail investors as its shareholders of MCX unlike other exchanges which have majority stake with foreign and private entities.
Experts said that the robust demand for MCX IPO could also lead to other exchanges getting listed.
The offer was subscribed 91 per cent on the first day itself,while it was fully covered in early morning bidding on the second day.
In an unprecedented development,the retail portion of the IPO was fully subscribed before the other segments and by the second day more than half of the demand had come from retail investors and the rest from others.
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.