MCX IPO: Will a 40 percent premium enthuse primary market today?

India’s largest commodity exchange, MCX, which raised over Rs 650 crore through an initial public offering is set to debut on the domestic bourses today.

Multi-Commodity Exchange, which received bids worth Rs 35,000 crore is the first Indian exchange that will be listed on the bourses and is expected to list at a premium of around 35 to 40 percent, says an Economic Times report .

With the issue price fixed at Rs 1032, analysts say the issue could get a range of Rs 1350 to Rs 1380.MCX’s issue was subscribed 54 times with retail subscription at 24 times.

MCX is the first company to be listed after Sebi introduced circuit filters on the listing day. According to Sebi norms, open bidding session will begin from 9 am to 10 am, while the equilibrium price will be determined at 9:45 am.

“MCX will have to list at roughly 35-40 percent premium if they have to break even on their investment. Retail investors, who put applications worthRs 2 lakh in the issue, have got about eight shares,” said the ET report.

As Firstpost had explained earlier If someone has applied for up to 120 shares, only 6 shares will be allotted; and that too not everyone will get the shares. Of every 13 people who have subscribed to the issue, the number of people who will actually get shares will range from 1 to 11 depending on the total number of shares subscribed for.

However, expectation in the market has been weak since last week due to high borrowing costs, the failed ONGC auction and the poll results which have raised doubts about the government’s ability to initiate big bang reforms.

This is why market will be waiting to see the listing of MCX which raised over Rs 35,000 crore for its Rs 660 crore IPO. Will this 35 percent to 40 percent premium revive the primary market?

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