MCX's valuation looks attractive: Microsec

Multi Commodity Exchange of India (MCX), country's largest commodity exchange, is set to open its initial public offer for subscription on today. This is India's first exchange to hit the capital market, offering 64.27 lakh equity shares (dilution of 12.6% post issue) through issue. MCX is a market leader in the commodity exchange business with 87.5% market share and significant presence across key commodities like gold, silver, copper, crude oil, etc, which gives it competitive edge in a rapidly growing market.

At the upper price band of Rs 1032 and lower price band of Rs 860, the issue of Multi Commodity Exchange is attractively priced at around 4.90x and 4.08x its 9MFY12 book value of Rs 210.58 crore. The company is trading at P/E of 15.08x on the lower side of the band and 18.11x on the higher side of the price band on its annualized FY12 EPS of Rs. 56.98. On comparing with global players, the valuation looks attractive. We recommend investors to Subscribe to the issue with a long-term view.

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