MCX IPO subscribed 91% on first day

The Multi Commodity Exchange (MCX) public issue was subscribed by 91 per cent with 23 per cent bids coming at the cut-off price.

Interestingly, the retail portion of MCX IPO was subscribed 1.5 times. The high net worth individual portion was subscribed 0.16 times and institutional portion was subscribed 0.74 times.

Cut-off price is the issue price decided by the company based on majority demand post subscription. The price band of the IPO is Rs 860-1,032 per share and MCX will raise Rs 663 crore at the upper end of the band.

MCX had proposed to sell 64,27,378 equity shares out of which 9,26,606 shares were allocated to 12 anchor investors on Tuesday at Rs 1,032 a piece for a total of about Rs 96 crore.

Anchor investors include Kuwait’s sovereign wealth fund and investment management firm Wellington Management, besides a string of mutual funds and other financial investors, such as Blackrock Global, Deutsche Securities, Tata AIG Life, ICICI Prudential, Acacia, etc. The anchor investors are subscribing to shares priced at Rs 1,032 a share. The issue will close on February 24.

After IPO, MCX will become the first listed exchange in the country. For the nine months ended December 31, 2011, MCX had total income of Rs 474 crore and net profit of Rs 220 crore. Given the company is looking at a valuation of over Rs 5,200 crore ($1.05 billion) at the upper end of the price band, it is seeking a PE multiple of around 18 times its trailing net profit on an annualised basis.

This is the biggest IPO since L&T Finance Holdings raised over Rs 1,200 crore in its maiden public float last July. The MCX public issue entirely comprises sale offer by existing shareholders (including main promoter Financial Technologies (India) Ltd) offering 6.4 million shares for sale, accounting for 12.6 per cent stake.