MCX public issue opens on Wednesday

India's largest commodity bourse MCX will hit the capital market on Wednesday with an estimated Rs 663 crore initial public offer (IPO), pursuant to with it would become the country's first ever exchange to get listed.

The bidding for shares in the IPO - the first in the year 2012 - will open on Wednesday and close on February 24, MCX Managing Director and CEO Lemon Rutten said.

The price band of the IPO has been fixed in the range of Rs 860 to Rs 1032 per share, with a face value of Rs 10 each.

Based on the upper end of the price band, the IPO could raise up to Rs 663 crore. Pursuant to the IPO, MCX shares would be listed on the BSE.

Investment banking sources said that shares are getting huge over-subscription of over 50 times from the anchor investors, the book-building for whom would end on Tuesday night.

The anchor investors, which are generally qualified institutional shareholders, are alloted shares a day before the bidding opens for public investors.

Sources said that the demand is robust for the shares, as gauged from the huge premium being commanded by them in the grey market.

The IPO has also received favourable comments from various brokerage firms and equity research entities.

Recommending its clients to subscribe to the IPO, HSBC Invest Direct said MCX is likely to be able to sustain its profitability going forward due to slower growth in operating costs, in comparison to its revenue growth. It has termed the IPO as attractive valued.

CLSA has also said that the IPO was reasonably priced at upper band and it was a profitable franchise.

At least 50 per cent of net offer will be allotted to qualified institutional buyers, not less than 15 per cent to non-institutional bidders and not less than 35 per cent to retail individual bidders.