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Anchor investors step up selling in MCX shares

Scrip slides 20% in about a month to trade below IPO price of Rs 1,032 apiece

Palak Shah  |  Mumbai 

Barely two months after Multi Commodity Exchange (MCX) turned the darling of the stock post-listing on the Bombay Stock Exchange (BSE) in March, have hit the sell button, ask stock brokers.

As a consequence, the share price of the Rs 660-crore initial public offering (IPO) is now trading below its issue price of Rs 1,032. The scrip is down over 20 per cent in over a month and was traded at Rs 1,009 last Friday. was an offer for sale by promoters, including Financial Technologies, State Bank of India, GLG Financials Fund, Alexandra Mauritius Limited, Corporation Bank, and Bank of Baroda.

However, analysts say in such a market scenario, institutions are not shying away from profit booking in most top companies. Rupee is on a downward spiral hurting foreign players the most and triggering their stop losses. The Indian currency has shed over 10 per cent against the dollar this year.

Also, delay of the proposed Forward Contract Regulation Act (FCRA) Amendment Bill has come as a bad for A review of could have ensured more volumes in the commodity segment as it facilitates the entry of institutional investors and introduction of new products for trading, such as options and indices.

The concept of was introduced by the Securities and Exchange Board of India in 2009 to bring in a class of investors with a slightly longer-term view to help the price discovery process and control listing day volatility. can subscribe up to 30 per cent of the portion reserved for qualified institutional buyers (QIB) in an IPO. In some cases, the portion is 50-60 per cent of the book built.

However, in many past IPOs, it was noticed that made a swift exit post their short one month lock-in period.

The IPO had generated a huge frenzy just a couple of months ago since it was sold as a new concept stock in the domestic Twelve had bought around Rs 95 crore worth of shares. Blackrock Global Funds, Deutsche Securities, Kuwait Investment Authority, Credit Suisse, Wellignton Management Company, Acacia Conservation Fund and GMO Emerging Domestic Opportunities Fund were the overseas anchors, while Tata AIG Life, Oriental Bank of Commerce, Life Insurance Corporation, ICICI Prudential, Birla Sun Life and Sundaram Mutual Fund were domestic investors.

Following anchor subscription, the IPO saw demand for Rs 36,000 crore worth of shares as it was oversubscribed 54 times.

In March, the euphoria to trade or own shares was such that the National Stock Exchange had to allow its listing under the permitted category due to fear of losing volumes to rival had decided to list only on the as its group companies were involved in legal disputes with NSE. shares rose nearly 40 per cent from its issue price to touch a high of Rs 1,426 post-listing. On the first day itself, about Rs 1,865 crore worth of shares were traded on NSE and together, of which the former's market share was 56 per cent.

During the roadshow, V K Bansal, chairman of Morgan Stanley India had expressed a view that while listed global exchanges trade at 17-18 times earnings on average, Asian exchanges trade at an average price to earnings (PE) of 25. The valuation is close to that of Hong Kong Exchanges and Clearing Ltd, which trades at 29 times historical earnings. Morgan Stanley was one of the lead managers.

Globally, the average PE for exchanges is around 18. The largest exchange in the world, CME Group Inc, which has a market capitalisation nearly 20 times higher than MCX, has a PE multiple of 11.

If allows the Stock Exchange (SX) to trade in equities it could be a big positive for as it holds large stakes in the equity exchange.

First Published: Mon, May 07 2012. 00:22 IST
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