The Multi Commodity Exchange (MCX) initial public offer (IPO) will be open for subscription tomorrow. MCX, which is promoted by Financial Technologies, will be the first exchange to be listed in India.
Brokerage firm CLSA has advised investors to subscribe to the IPO citing reasonable pricing. The price band implies price earnings of 15-18 times based on annualised nine month FY12 earnings, CLSA said. The growth potential justifies valuations, it added.
We have priced it in such a way that it is received from all categories of investors, Ravi Kapoor of Citigroup told NDTV Profit today. Citi is one of the book running lead managers for the IPO.
MCX does not have any direct competitors listed in India. The IPO is priced at around 10-30% premium to global peer valuation but analysts said this premium can be justified due to its higher growth prospects.
Issue details:
Offer dates: 22 February-24 February 2012
Price band: Rs 860-1032 per share
Issue size: Rs 552.7-663.3 crore
Number of shares: 64.27 lakh (12.6% stake)
Book running lead managers: Morgan Stanley, Citi, Edelweiss
Promoter Holding (Financial Technology): 31.8% pre-issue (26% post-issue)
Company background:
MCX is largest commodities exchange in India
It offers trading in 49 commodity futures
Total value of contracts traded in the nine months (up to December) in FY 2012 was Rs 1,19,806.9 billion
MCX represents 87.3% of the Indian commodity futures industry
MCX is the largest silver exchange & second largest gold, copper exchange
As of December 2011 MCX has 2,153 members on exchange’s platform,
MCX has over 2,96,000 terminals
MCX derives income primarily from transaction fees
FY11 earnings:Total income at Rs 448 crore
Profit after tax at Rs 176 crore
Earnings per share of Rs 34.50
9M (nine months) FY12:
Total income Rs 475 crore
Profit after tax Rs 218 crore
EPS of 42.75 for the period
((FY12 EPS is likely to be over Rs. 60))
Other ratios: Paid up equity capital: Rs 51 crore
Networth: Rs 1,074 crore
Book value: Rs 210 per share
Cash & cash equivalent: Rs 1,200 crore