Multi Commodity Exchange (MCX), the country’s biggest commodity exchange by turnover, will hit the capital market today with an estimated Rs 663 crore initial public offer (IPO). The issue closes on February 24 and is being offered in a price band of Rs 860 to Rs 1,032 per share, with a face value of Rs 10 each. The offer comprises 64, 27,378 equity shares, accounting for a 12.6% stake in MCX. This would include 2, 50,000 shares reserved for employees. Incidentally, this would be the country’s first ever exchange to get listed.
Financial Technologies is the biggest promoter of MCX) FTIL currently holds 31.2 per cent stake. The objective of the issue is to achieve the benefits of listing on the Stock Exchanges.
Incorporated in 2003, MCX is an India based electronic commodity futures exchange, which provides online trading along with clearing and settlement operations for commodity futures across India. MCX is the largest among Indian exchanges and has over 80% of the market share of the Indian commodity futures exchange industry.
It allows trading in more than 50 commodities across sectors like bullion, metals, energy, weather, and agricultural products. Its strengths include it being the world’s largest exchange in Silver, the second largest in Gold, Copper and Natural Gas and the third largest in Crude Oil futures, with respect to the number of futures contracts traded, with its over 2000 registered members operating through over 100,000 trader work stations, across India. It is the fifth largest commodity futures exchange globally in terms of the number of contracts traded.On the financial side, MCX is profitable and generates positive cash flow besides being debt free.
Incidentally, CRISIL has assigned a ‘Grade 5/5‘ to the MCX IPO which indicates ‘Strong Fundamentals’. Investment is recommended in the issue.
Issue Details
Issue Open: February 22, 2012 - February 24, 2012
Issue Price: Rs.860 to Rs.1032
Issue Type: 100% Book Built Issue IPO
Issue Size: 6,427,378 Equity Shares of Rs. 10
Issue Size: Rs. 663 Crore
Face Value: Rs. 10 per Equity Share
Market Lot: 6 shares and multiple of 6
Listing At: BSE, NSE