Indian IPO

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Wednesday, July 23, 2008

MCX public issue by August

Braving the turbulent market conditions, the MCX initial public offering (IPO) is slated for launch during the first half of August. Mr Joseph Massey, Joint Managing Director, MCX, said the decision on the exact date for the IPO launch will be taken early next week.

MCX, which received the SEBI approval for IPO on May 15, has to tap the market before August 15, after which the SEBI approval will expire.

IPO deferred

Companies that had received SEBI’s nod has to complete the process of listing within 90 days, else they have to re-file their offer documents, said an analyst. Once the process is completed, MCX will become the first commodity exchange in India to be listed on a stock exchange.

At an expected price band of Rs 500-600, the company will raise about Rs 500 crore to Rs 600 crore, said a source. According to the draft red herring prospectus (DRHP), the public issue will be of one-crore equity shares of Rs 10 each.

The IPO would comprise fresh issue of 6-million shares and another 4-million shares will be offloaded by Financial Technologies Ltd and Corporation Bank. Earlier, MCX, in June 2006, deferred its IPO plan after receiving SEBI’s approval.

However, this time around, Mr Jignesh Shah, CEO and Managing Director of MCX, was on record that the issue will hit the market despite weak market sentiments. Recently, NYSE Euronext acquired 5 per cent equity stake in the MCX for Rs 220 crore, valuing the exchange at USD 1.1 billion.

Highest rating

Rating agency CRISIL recently rated MCX IPO at the highest grade of 5/5. The grade indicates that the fundamentals of the issue are strong. It is neither a trading recommendation, nor a comment on the future market price or its suitability, it said.

Currently, MCX enjoys market leadership, with a share of 77 per cent in volumes traded on commodities exchanges in India. The company has focused on commodities such as bullion, energy and metals, which are benchmarked to international prices, Crisil said. Of the company’s total turnover, bullion accounts for 53 per cent, metals for 28 per cent, energy for 16 per cent and agricultural commodities account for the rest, reports The Hindu Business Line.

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