Merchant bankers start disclosing IPO track-record

In a move that could help investors take an informed decision on Initial Public Offers (IPO), the merchant bankers have begun disclosing the track record of IPOs managed by them earlier.

In one of the first such disclosures, Edelweiss, City and Morgan Stanley -- the three bankers of the upcoming IPO of the country's largest commodity bourse MCX -- have made public the details of the IPOs managed by them in the past.

The track-record details have been provided in the final IPO document of MCX, which will hit the market on February 22 and would close on February 24, as also on the websites of the three merchant bankers, acting as Book-Running Lead Managers (BRLMs) of the upcoming public offer.

As per the track record disclosure, Morgan Stanley handled five IPOs in 2009-10 and four in 2010-11. Out of these, six IPOs traded at a premium on the listing day, while three traded at a discount.

Further, three IPOs traded at a discount as on the 30th day of the listing, while six traded with a premium. Morgan Stanley has not managed a single other IPO so far in 2011-12.

The other banker, Citi, has handled three IPOs in 2009-10, two in 2010-11 and one so far in 2011-12. Out of these, two IPOs traded with a discount on the listing date and four traded with premium on that day.

However, four IPOs managed by Citi traded at a discount on the 30th day of listing, as against two with a premium.

The third banker Edelweiss managed two IPOs in 2009-10 and six in 2010-11. Out of them, two traded with a discount and six with a premium on the listing date.

On the 30th day of listing, one traded with a discount and four others with a premium.

The bankers have also provided detailed information for individual IPOs handled by them, including their size, listing price and their comparison to the movement in benchmark indices for different periods.

Earlier this year, Sebi made it mandatory for the merchant bankers to make public the track record of the previous offers managed by them and share the same with the prospective investors of any new IPO being handled by them.

Besides being the first IPO to provide such disclosures, MCX's public offer would also make it the first exchange in the country to get listed and probably the first IPO of 2012 in the Indian capital market.

The IPO has also been assigned top-most '5/5' IPO grade, indicating strong fundamentals of the public offer.