The Initial public offer (IPO) of top commodity exchange MCX was subscribed 91 per cent on its first day today,as the first-ever IPO by an Indian bourse witnessed robust demand from retail as well as institutional investors.
The shares reserved for retail investors got over-subscribed 1.5 times on the first day itself,with bids worth an estimated over Rs 300 crore.
Besides,the portion reserved for institutional investors was subscribed 74 per cent with bids worth about Rs 150 crore.
The IPO,which is estimated to raise about Rs 663 crore and has already seen ‘anchor investors’ being allocated shares worth about Rs 100 crore,today got total bids worth about Rs 500 crore,while bidding would continue for another two days.
The bidding began this morning for the MCX offer,which also happens to be the first IPO of the year 2012,and would continue till February 24. The shares are being sold in the price-band of Rs 860-1,032 a piece.
In the first day of the IPO,the investors submitted bids for about 50 lakh shares,which accounted for 90.7 per cent of about 55 lakh shares being sold through the 100 per cent book-building process.
A total of 12 anchor investors have already been allocated about 9.27 lakh shares at the top-end of the price band,taking the overall IPO size to 64,27,378 shares.
Investment bankers said that the bids are largely coming at the top-end of the price band,enthused by the demand from anchor investors at that level and the issue could get oversubscribed multiple times.
The anchor investor portion was also oversubscribed several times,showing an unprecedented demand level for many months now as the primary market has remained sluggish for almost a year now.
The total offer of 64,27,378 equity shares account for a 12.6 per cent stake in MCX and 2,50,000 shares have been reserved for eligible employees.
Based on the upper end of the price band,the IPO could raise up to Rs 663 crore.
Brokerage firm Emkay Global Financial Services said that “scalable model,ability to generate sustainable free cash flows,healthy return ratios and reasonable valuations provide room for decent upside and has recommended investors to subscribe the issue.”
Another brokerage house Angel Broking said,”We believe MCX being the only major commodity exchange in India and the world’s fifth largest exchange can witness strong growth in revenue and profitability going ahead,which makes its valuation much more attractive than global peers.
At the end of today’s bidding,the portions reserved for Qualified Institutional Investors was subscribed 74 per cent,while the retail portion was oversubscribed 1.5 times.
Edelweiss Financial Services,Citigroup Global Markets India Private Ltd and Morgan Stanley India are the booking running lead managers of the share sale.
The promoters FTIL currently holds 31.2 per cent stake in MCX,which would come down to about 26 per cent after the IPO.
Financial Technologies (India) Ltd,State Bank of India,Bank of Baroda,GLF Financials Fund,Alexandra Mauritius Ltd,Corporation Bank and ICICI Lombard General Insurance Company are seven investors who will be divesting part of their holdings in MCX.
MCX has more than 70 per cent share in the annual estimated turnover of Rs 177 lakh crore for the entire commodity derivatives market.
Globally,MCX is the fifth largest commodity exchange,while it figures among the top two positions in gold and silver segments.
It would be the first exchange in India to go public,putting the country at part with other markets like the US,UK,Japan,Australia and Hong Kong.