Indian IPO

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Thursday, June 15, 2006

Sebi clears MCX IPO

The Securities and Exchange Board of India, Sebi, has cleared the initial public offering, IPO, of commodity exchange MCX. When listed, MCX would be the country's first exchange to do so, joining a select few globally in that league, reports The Hindu Business Line.

Jignesh Shah, CEO and managing director of MCX, said that the exchange is going ahead with the issue despite the weak market sentiment. The company received Sebi's consent at the end of last week.

He said the exact price band for the issue would be finalised only after discussions with the merchant bankers of the issue, which include Citigroup, DSP Merrill Lynch and Kotak Mahindra.

The company is sticking to the original size of 50 lakh shares through the IPO. As per the original plan, the company hopes to mobilise about Rs 300 crore (Rs 3 billion) through the IPO, which would put the issue price in the region of Rs 600 per share. Though Shah did not reveal the exact timing of the IPO, he said the company "will not defer" it.

On the issue price, he said: "We are not asking for too much (from the investors)." He pointed out that leading global fund house Fidelity had taken a 9.24% stake in the company at Rs 600 per share. "Fidelity's stake has one-year lock-in arrangement," Shah said.

Financial Technologies (India), a listed entity, is the promoter of MCX. Its stake in MCX will come down to 53.75% from 64.30% after the IPO. Several other public sector banks including State Bank of India and its associate banks, NABARD and the National Stock Exchange also hold stakes in the company.


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