MCX puts up a stellar IPO: Here is all you want to know about it

[caption id= 'attachment_678488' align='aligncenter' width='1024'] MULTI COMMODITY EXCHANGE - IPO SUBSCRIBED 54 TIMES >World's 5th largest commodity futures exchange by number of contracts traded; India's No. 1 commodity exchange >Has 82% market share of commodity exchange market in India >Company offers trading in 49 commodity futures including bullion, ferrous and non-ferrous metals, energy and agriculture >By Dec 31, 2011, MCX had 2153 members, with over 2.96 lakh terminals >MCX offered 64.27 lakh shares via the IPO route, raising Rs 663.3 crore at higher end of the price band of Rs 860-1032/share >Company did not get any money via public issue >Financial Tech (promoter) to meet statutory compliances cut stake to 26% from 31.18% >Selling shareholders - SBI, Bank of Baroda, Corporation Bank, ICICI Lombard >Grew at around 35-40% CAGR & 68% EBITDA CAGR in the last four years [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] EXPERTS SEE MCX LISTING AROUND RS 1,350-1,400 >Reports state that the grey market premium is around Rs 350-400 over issue price of Rs 1032 >Many brokerage houses were expecting listing returns of around 15-30% >Experts are bullish the stock will not fall below its issue price in the future [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] ISSUE PRICE DISCOVERED AT RS 1,387 ON BSE, UP 34.40% OVER ISSUE PRICE >MCX is the first new listing to be subject to the recently introduced price discovery mechanism through a call auction in the first one-hour of trade by SEBI >One can enter orders which won't get executed in the 1st one-hour; then the price is discovered by matching orders >Based on the price arrived at through the call auction between 9:00 am and 10:00 am, there will be a 20% circuit filter on the stock for the rest of the session >Upper circuit limit was at Rs 1,660.8 while lower circuit was at Rs 1109.6 a share [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] OPENING PRICE AT RS 1387 ON BSE; RS 1408 ON NSE >In early trade - it touched an intraday high of Rs 1,426 on BSE and Rs 1,428.55 on NSE >Slowly some profit booking started stepping in [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] MANAGEMENT SPOKE TO MEDIA >MCX management said they would look at acquiring other exchanges going forward [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] STOCK FALLS BELOW RS 1300 IN LATE TRADE >Stock touched an intraday low of Rs 1,282.10 on BSE and Rs 1,282.20 on NSE >Investment Advisor, SP Tulsian advised buying MCX if it falls below Rs 1,300 [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] EXPERTS READ >Sudip Bandyopadhyay, MD & CEO, Destimoney Securities said "If somebody is a medium-to-long term investor, it’s a good buy at these levels, a solid company, and no competition, with 80% plus market share and continuously growing, good profitability track record." >Sharan Lillaney, research analyst at Angel Broking feels a 20% upside is possible for MCX over the next 12 months. >Angel has a 'buy' rating on MCX. What is even more interesting is that it can end up with Rs 87 EPS by FY14! [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] MCX ENDS AT RS 1296.70 ON NSE & RS 1297.05 ON BSE >Stock up 25.68% on BSE and 25.65% on NSE >Traded with volume of 60.18 lakh shares on BSE & 79.4 lakh shares on NSE [/caption] [caption id= 'attachment_678488' align='aligncenter' width='1024'] CONCERNS >Government may levy a commodity transaction tax which would raise trading cost & negatively affect volumes (high chances in Budget 2012) >MCX uses software and IT support from Financial Tech (promoter); payments to promoters are 46% of PBT - change in terms can affect profitability >Major revenues from hedging can vanish: nearly 35% of total volumes come from hedging >Concentration risks: Four commodities form 70-80% of MCX’s trading volumes (Silver, Gold, Crude oil and Copper dominate MCX’s trading value) >Stamp duty is another factor which impacts business and many of MCX's large members operate from the state of West Bengal where there is no stamp duty >Exchanges may be permitted to offer options-contracts as well; currently they offer only futures contracts >Banks may be permitted to trade, but RBI may restrict their participation [/caption]