MCX to launch Rs 620 crore IPO by February end

Mumbai: Multi Commodity Exchange (MCX), India’s biggest commodity exchange by turnover, plans to launch an initial public offering of shares on February 21 to raise up to Rs 620 crore ($125 million), two sources with direct knowledge of the matter said on Friday.

India’s first IPO of the year will be a key test of investor appetite for share sales in Asia’s third-largest economy after weak markets forced many companies to shelve stock offerings last year.

The MCX public offering will open on February 21 for cornerstone investors and a day later for general investors.

The issue will close on February 24, said the sources, who declining to be named as the matter is not public yet.

An MCX spokesman declined to comment.

MCX, which will become the first Indian bourse to list its shares on an exchange, said last year it would sell more than 6 million shares representing a 12.

Majority shareholder Financial Technologies (India) Ltd (FITE.NS) and investors including state-controlled State Bank of India and Bank of Baroda (BOB.NS) will sell part of their holdings, the company said in its draft prospectus.

The Bombay Stock Exchange’s main index dropped nearly 25 percent in 2011, hit by the eurozone debt crisis, rising interest rates and concerns about slowing economic growth in India. Overseas investors were net sellers of about $500 million of Indian stocks last year.

Indian companies raised less than $10 billion through share sales last year, down from more than $24 billion in 2010, according to Thomson Reuters data.

Share offerings in the pipeline include a follow-on share sale by state-run companies Oil and Natural Gas Corp (ONGC.NS), Steel Authority of India (SAIL.NS) and Bharat Heavy Electricals Ltd (BHEL.NS).

Hopes of a revival in share sales including IPOs have risen after Carlyle Group, Warburg Pincus and Temasek Holdings raised nearly $740 million by paring their holdings in Indian financial companies in three deals this month.

The sales followed a more than 11 percent jump in the market index last month, its first rise in three months and the strongest month since September 2010.

Morgan Stanley (MS.N), Citigroup (C.N) and India’s Edelweiss Capital (EDEL.NS) are the bookrunners for the MCX share sale, according to the company’s draft prospectus.