MCX fixes $ 135 mn IPO price at Rs 1032/sh

India's Multi Commodity Exchange (MCX) has priced its initial public offering at the top of an indicative range, after investors bid for more than 54 times the shares on offer in a sign of revival of the country's dormant primary market.

MCX, which will become the first Indian bourse to list its shares on an exchange, has fixed the IPO price at Rs 1,032, raising Rs 6.6 billion, the company said in a newspaper advertisement on Monday.

The exchange's majority shareholder Financial Technologies India Ltd and investors including state-controlled State Bank of India and Bank of Baroda sold part of their holdings in the IPO.

About 6.4 million shares were offered in the IPO, in a price band of Rs 860 to Rs 1,032 a piece, including by other shareholders.

The first major IPO by an Indian company in seven months is seen as a test of demand for new share offerings after weak local markets and the euro zone debt crisis forced many companies to shelve equity sale plans last year.

Morgan Stanley , Citigroup Inc and India's Edelweiss Capital were the bookrunners for the IPO.

US markets may see bloodbath from tomorrow

The Indian market has been under pressure over the last few sessions. Sushil Kedia, president of ATMA says, the reversal is in place. "Within the reversal, as we break 5,400 in the day, a further new short trade will come. My bias is to remain short on Nifty," he adds.

MCX IPO subscribed 91% on Day 1

The Initial Public Offer of top commodity exchangeMCX was subscribed 91% on its first day today, as the first-ever IPO by an Indian bourse witnessed robust demand from retail as well as institutional investors.

The shares reserved for retail investors got over- subscribed 1.5 times on the first day itself, with bids worth an estimated over Rs 300 crore.

Besides, the portion reserved for institutional investors was subscribed 74% with bids worth about Rs 150 crore.

The IPO, which is estimated to raise about Rs 663 crore and has already seen 'anchor investors' being allocated shares worth about Rs 100 crore, today got total bids worth about Rs 500 crore, while bidding would continue for another two days.

The bidding began this morning for the MCX offer, which also happens to be the first IPO of the year 2012, and would continue till February 24. The shares are being sold in the price-band of Rs 860-1,032 a piece.     

In the first day of the IPO, the investors submitted bids for about 50 lakh shares, which accounted for 90.7% of about 55 lakh shares being sold through the 100 per cent book-building process.

A total of 12 anchor investors have already been allocated about 9.27 lakh shares at the top-end of the price band, taking the overall IPO size to 64,27,378 shares.

Investment bankers said that the bids are largely coming at the top-end of the price band, enthused by the demand from anchor investors at that level and the issue could get oversubscribed multiple times.

The anchor investor portion was also oversubscribed several times, showing an unprecedented demand level for many months now as the primary market has remained sluggish for almost a year now.

The total offer of 64,27,378 equity shares account for a 12.6% stake in MCX and 2,50,000 shares have been reserved for eligible employees.

Based on the upper end of the price band, the IPO could raise up to Rs 663 crore.

Brokerage firm Emkay Global Financial Services said that "scalable model, ability to generate sustainable free cash flows, healthy return ratios and reasonable valuations provide room for decent upside and has recommended investors to subscribe the issue."

Another brokerage house Angel Broking said, "We believe MCX being the only major commodity exchange in India and the world's fifth largest exchange can witness strong growth in revenue and profitability going ahead, which makes its valuation much more attractive than global peers.

At the end of today's bidding, the portions reserved for Qualified Institutional Investors was subscribed 74%, while the retail portion was oversubscribed 1.5 times.

Edelweiss Financial Services, Citigroup Global Markets India Private Ltd and Morgan Stanley India are the booking running lead managers of the share sale.

The promoters FTIL currently holds 31.2% stake in MCX, which would come down to about 26 per cent after the IPO.

Financial Technologies (India) Ltd, State Bank of India, Bank of Baroda, GLF Financials Fund, Alexandra Mauritius Ltd, Corporation Bank and ICICI Lombard General Insurance Company are seven investors who will be divesting part of their holdings in MCX.

MCX has more than 70% share in the annual estimated turnover of Rs 177 lakh crore for the entire commodity derivatives market.

Globally, MCX is the fifth largest commodity exchange, while it figures among the top two positions ingold and silver segments.

It would be the first exchange in India to go public, putting the country at part with other markets like the US, UK, Japan, Australia and Hong Kong.

Nifty opens below 5500

The Nifty was subdued in an early trade, opening below the 5500 level amid volatility. Consistent inflow of foreign money has been supporting the market whereas on other side, concerns like rising oil prices, disappointing economic data from major continents like US & Europe still weighed on the market.

Metals, capital goods and power stocks were down while FMCG, technology and HDFC group companies' shares were on buyers' radar.

The Sensex was down 44.34 points to 18,100.91 and the Nifty fell 18 points to 5,487.50. Asian markets were down on lacklustre economic data from US and Europe. Hang Seng, Straits Times, Kospi and Taiwan Weighted fell 0.5-1%.

In the largecap space, DLF gained 2% as the company is going to sell 350 flats for Rs 500 crore in Gurgaon.

SBI rebounded with 2% gains after clarification on Kingfisher news.

Ranbaxy Labs rose 1.5% ahead of quarterly numbers today.

Among others, TCS, Infosys, ITC,  HDFC, Wipro and Tata Motors were supporting the market.

However, Bharti Airtel fell 3.5% post Econet sought USD 3 billion damages from the company.

Sterlite, Tata Steel, Hindalco, Jindal Steel, Sesa Goa, Coal India, L&T, BHEL, Maruti, M&M and ICICI Bank were under pressure.

The broader markets were flat and even the breadth was neutral.

Among the second line shares, Kingfisher Airlines fell over 1% as I-T department continued to freeze company's accounts. Also, SBI said it has not given any fresh loans to Kingfisher.

UCO Bank, Dena Bank and LIC Housing Finance were down 1-2%.

However, Alfa Laval shot up 15% after its delisting offer received strong response.

ABB rose 3.5% ahead of quarterly numbers.

Voltas, Shree Renuka, Alok Industries and Dish TV gained 1-2%.

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