MCX IPO Review And Crisil Rating: IPO Issue Size And Listing Date

The MCX or Multi Commodity Exchange was incorporated in 2002 in India and was subsequently got the permanent recognition from Indian government in 2003. The MCX has 2153 members on 296,000 platforms in 1,572 cities pan India. It conducts future trades in 49 commodities including ferrous and non-ferrous, bullion, agricultural products and energy. The total volume of future contracts traded during the last calendar year, ended 31st December, 2011 was Rs.

119, 807 billion. It is the largest silver exchange (38%) and the second largest trading exchange for gold (28%), natural gas and copper globally. It held the third largest rank in crude oil trading in terms of number of contracts of the commodities mentioned so far.

Multi Commodity Exchange IPO Review And Rating

MCX IPO was promoted by Financial Technologies (India) Limited (FTIL) which had a pre IPO stake of 31.18%. They are one of the leading BSE and NSE listed technical service provider and software developer in the finance and technological areas including commodities, equities and foreign exchange.

The promoters within the FTIL are La-Fin Financial Services Pvt Ltd (26.50%), Mr. J. Shah (18.10%) and Mr. D. Neralla (0.13%).

This MCX IPO was rated by CRISIL as Grade 5 (the highest in the category). This means CRISIL has ranked this IPO as an entity with strongest fundamentals.  The grades are awarded in a descending order where Grade indicates the poorest fundamentals.

The grading report indicates the leadership of MCX in the Indian future commodity market over last 4 years and the future benefits that will accrue to MCX due to changes in the Forward Contracts (Regulation) Act with its strong management support team.

MCX IPO Issue Size And Listing Date

The issue size of this IPO is 6,427,378 equity shares with a face value of Rs 10 with a price band between Rs. 860 and Rs. 1032.

The company had a Earnings per share (EPS) Rs.34.50 for the year ending 2011 with a book value of Rs 210 on the same date with total income and net profit of Rs. 447.40 crore and Rs. 176.20 crore respectively. It has been estimated that with the current trend the EPS will grow to around Rs. 60 this year and the lowest price band has been set at Rs. 860 with an upper band of Rs. 1,032 with a Price to Earnings Ratios (P/E Ratio) of 15 and 18 times respectively. The financial analysts are of opinion that if MCX can maintain its current holding of market share (87%) with its strong fundamentals and at the same time can take the benefits of new amendments of Forward Contracts Regulation Act, 1952, its both upper and lower band of issue price is justified.

MCX IPO Listing Date

The listing date of MCX IPO was March 9, 2012 on BSE and NSE. Stock opened at Rs. 1,387 at a handsome gain over its issue price.

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