MCX IPO subscribed 1.23 times: Who are the biggest gainers?

An initial public offering by the Multi Commodity Exchange (MCX) to raise up to Rs 663 crore was fully covered on the second day of its launch, stock exchange data showed on Thursday.

On the first day itself the IPO got subscribed 91 percent, with bids worth an estimated over Rs 300 crore. The retail part was oversubscribed, while the institutional part was subscribed 74 percent with bids worth about Rs 150 and the HNI portion was subscribed 16 percent. On the second day, the total subscription stands at 125 percent currently, when the retail segment being oversubscribed the most.

[caption id=“attachment_222532” align=“alignleft” width=“380” caption=“In the first day of the IPO, the investors submitted bids for about 50 lakh shares, which accounted for 90.7 percent of about 55 lakh shares being sold through the 100 percent book-building process.”]  [/caption]

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MCX, which will become the first Indian bourse to list its shares on an exchange, is offering about 64.3 lakh shares in the IPO in a price band of Rs 860 to Rs 1,032 a share. The public sale opened on Wednesday and will close on Friday.

According to a report in the Times of India, the three banks - State Bank of India, SBI Life Insurance, Corporation Bank and Bank of Baroda -that are offloading part of their holdings in MCX, witnessed their initial investments rise by nearly 125 times in about seven years.

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.

Edelweiss Financial Services, Citigroup Global Markets India Private Ltd and Morgan Stanley India are the booking running lead managers of the share sale.

The promoter FTIL currently holds 31.2 percent stake in MCX, which would come down to about 26 percent after the IPO.

The first Indian IPO this year is seen as a key test of investor appetite for share sales in the local market after weak markets forced many companies to shelve stock offerings last year.

Morgan Stanley , Citigroup and India’s Edelweiss Capital are the bookrunners for the share sale.

Agencies