The Multi Commodity Exchange (MCX) initial public offer (IPO) is open for subscription. MCX, which is promoted by Financial Technologies, will be the first exchange to be listed in India.
Most brokerage firms have advised investors to subscribe to the issue. (Also read: 10 facts about the MCX IPO)
"It is a very differentiated and unique opportunity for investors to invest in an exchange IPO. Overall volume on commodity exchange has grown by 32% and the overall operational margins and operational leverage that is there in this company is pretty big. It is reasonably priced. There is a great growth potential and once new segments are introduced it can give you further growth going forward," Hemang Jani, Senior VP at Sharekhan told NDTV Profit today.
Edited excerpts:
Growth potential:
The commodity market in India is still under-penetrated.
The option segment that contributes 65-70% in equity markets is not present in commodity market and it may be introduced at a later state.
More commodities and segments can be introduced going forward.
Valuations:If you annualise the nine month numbers, the stock is available at 15-18 times FY12 calendar year earnings, which looks reasonable looking at the overall growth potential.
Compared to exchanges traded globally, some of the major ones where overall operating margin and growth is higher are quoting at 15-35% premium to what the MCX is available at.
What other brokerages say:
Religare:
Advice to subscribe as stock at 15-times looks cheap.
Stock can generate returns even at the higher end of the price band.
CLSA:
IPO priced reasonably, advice to subscribe.
Growth potential & valuation benchmarks are reasonable.
If MCX-SX is licensed to launch stock exchange, it will be a positive event.
IDFC:
Value only at lower band. At higher price stock looks fairly priced.