Traders eye 20 pct upside for MCX IPO
The first-ever IPO by an Indian bourse, which is estimated to raise about Rs 663 crore and has already seen anchor investors being allotted shares worth about Rs 100 crore, witnessed strong demands from institutional and retail investors with cumulative bids worth about Rs 500 crore.
Even with bidding set to continue for another two days, shares reserved for retail investors were over-subscribed 1.5 times on the first day itself, with bids worth an estimated over Rs 300 crore, while institutional investors bid about Rs 150 crore, subscribing 74 percent of the portion set for them.
The bidding for what was the year's first IPO, of nearly 55 lakh shares being sold in the price-band of Rs 860-1,032 a piece as part of a 100 percent book building process for a 12.6 percent stake in MCX, is set to continue till Feb 24.
The first day of the process on Wednesday, that came a day after 12 cornerstone investors pumped in about Rs 95.6 crore for 926,606 shares at 1,032 rupees a piece, saw bidding for about 50 lakh shares or 90.7 percent of the entire lot.
Traders said that with the anchor investors seen paying for the top end of the price band fixed for the public offering, enthused investors were also largely making bids at the top-end of the price band and the issue may get over-subscribed multiple times.
MCX's offer comprises of 64,27,378 equity shares to the public, carrying a reservation of 2,50,000 shares for eligible employees, with at least 50 percent of the net offer set aside for institutional buyers, 15 percent for non-institutional buyers and the rest for retail bidders.
The IPO of the private equity-backed commodity bourse will see half a dozen financial investors in the company part-exit and has been eagerly watched as it is one of the biggest issues to hit the Indian exchanges in a while.
Analysts, who said that the IPO would test the market for more primary issues, were bullish about the stock with most of them advising long term investments with an expected appreciation of about 20 to 25 percent in 12 months.
"After a debacle of IPOs, which we have had last year, all eyes would be on today's IPO itself...We expect an appreciation around 22-25 percent on conservative basis depending on the market conditions as well," Shweta Prabhu of securities firm Anand Rathi told an Indian daily.
Investment banking firm Unicon Investments also recommended subscribing the issue with 15-20 percent upside for long term investors asserting noting that strong Industry growth with dominant market share provides strong revenue visibility.
(Reporting by Divyanshu Dutta Roy) (IBNS -Posted on / )
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