MCX lists with 34% premium at BSE; soars further to Rs 1,420
Becoming the first Indian exchange to get listed, the country's largest commodity bourse MCX on Friday made a smart debut in the stock market and began trading with a significant premium of over 34% at the BSE.
After a record-breaking investor demand for shares in its Initial Public Offer (IPO) late last month, Multi-Commodity Exchange (MCX) saw robust buying interest in its debut trade on the stock market this morning and saw its price soaring past Rs 1,400 level within minutes of listing.
In the pre-open bidding, the shares attracted a premium of over 40% from its IPO price of Rs 1,032 a share and touched a high of Rs 1,450.
Based on a new price-discovery mechanism, followed for the first time in MCX listing, the shares finally opened normal trade at the BSE at Rs 1,387 -- a premium of 34%, and went on to gain further ground to a high of Rs 1,420.
At the NSE, the shares opened at Rs 1,408 and touched a high of Rs 1,428.25 by 1015 hours.
After becoming the first Indian exchange to come out with an IPO, and also the first public offer of the year 2012, MCX also became the first company to list under the new Sebi rules introducing pre-open bidding in the first-day trade of stocks listing after IPOs. Under the new guidelines, announced by Sebi on January 20, a pre-open bidding is conducted for one hour between 9 am to 10 am, pursuant to which an equilibrium price is discovered. Thereafter, a price band of 20% is imposed for the listing day trade.
These measures were adopted by Sebi to check wild price fluctuations in the listing day trade, as many stocks in the past have seen movements of even 100% or more on their first day of trade. Although MCX had offered to list its shares on the BSE alone, another stock exchange NSE in a late night circular on March 7 said that it was also admitted MCX shares for trading on its platform.
MCX had previously said that it would first observe the volumes on BSE for some time and then decide about NSE. However, NSE has not pro-actively offered to list MCX shares on its platform. Regulations allow an exchange to add a stock in the list of 'securities permitted to trade category' even if a company has not applied itself.
However, the move has come as a surprise as both NSE and the MCX founders (FTIL group) have been at the loggerheads for many years now over various issues, including direct competition in some business areas.
Some market experts said that MCX shares were expected to create strong volumes in the secondary market, given the demand worth Rs 36,000 crore for its IPO worth about Rs 650 crore, and NSE might not have wanted to lose the volumes to its rival BSE.
A listing ceremony was held at the BSE here to mark MCX' debut in the stock market. MCX Vice Chairman Jignesh Shah and CEO Lamon Rutten were among those present for the ceremony. MCX's promoter company Financial Technologies India Ltd is already listed at the BSE and NSE.
Post its listing, MCX has got lakhs of retail investors on its list of shareholders, unlike other privately-held exchanges where majority shares are owned by a few foreign and private entities.
Experts believe that the robust demand for MCX IPO and then an impressive listing could also lead to other exchanges getting listed and help revive the overall primary market.
The IPO got over-subscribed more than 54 times with bids worth about Rs 36,000 crore, as against the targeted proceeds of up to Rs 663 crore through sale of 64.27 lakh shares.
Out of this, over nine lakh shares were sold to 12 anchor investors for about Rs 96 crore, a day prior to the beginning of the three-day bidding for shares in the IPO on February 22.
The bidding for the remaining 55 lakh shares is estimated to have fetched about Rs 567 crore.
MCX had set a price band of Rs 860-1,032 per share for the IPO, and the final price was fixed at the top end (Rs 1,032) given the strong demand witnessed for the offer. The anchor investors were also allocated shares at the same price.
The first ever public offer by an Indian exchange has also emerged as the most successful IPO in about four years.
In terms of demand from retail investors, the MCX IPO is said to have surpassed all previous records, as the shares reserved for the retail shareholders were over-subscribed nearly 24 times -- higher than any major public offer so far.
Overall, it got subscribed 54.13 times with the highest over-subscription level since Anil Ambani-led Reliance group's R-Power IPO in January 2008 that was subscribed 73 times.
The previous highly successful IPO was of state-run Coal India in October 2010, which got subscribed 15 times overall, but the retail portion was subscribed only about two times.
The share sale in another public sector behemoth ONGC through a one-day auction recently got subscribed only about 98% only after state-run insurer LIC is said to have pitched a large majority of bids.
The promoters FTIL currently hold 31.2% in MCX, which would come down to about 26% after the IPO.
FTIL, SBI, Bank of Baroda, GLF Financials Fund, Alexandra Mauritius Ltd, Corporation Bank and ICICI Lombard General Insurance were the investors divesting part of their holdings in MCX through the IPO.