SEBI Approves MCX IPO Proposal


Mumbai: The Multi Commodity Exchange (MCX) Monday said market regulator SEBI has approved its Draft Red Herring Prospectus (DRHP) for an initial public offer (IPO), which will make it the first exchange in India to go public. The development is expected to encourage other exchanges to go for public listing as well like some of their global peers, observers said. According to MCX spokesperson, the clearance of DRHP by the Securities and Exchange Board of India (SEBI) is valid for 12 months and the exchange has been asked to file the offer document with stock exchanges. Under the offer, some existing shareholders of MCX, including its promoter Financial Technologies India Ltd (FTIL), plan to sell 6.4 million shares, constituting 12.6 percent of the company's paid-up equity capital. FTIL, which currently holds 31 percent in MCX will dilute its holding to 26 percent after the IPO to conform with the new norms prescribed by the commodity markets regulator FMC on the equity structure for the national commodity exchange. Other investors planning to sell some of their stake are State Bank of India, GLG Financials Fund, Alexandra Mauritius, Corporation Bank, ICICI Lombard General Insurance Company and Bank of Baroda. The MCX official said the IPO listing is expected to ensure the highest level of shareholder and public scrutiny, corporate governance and transparent trade practices. MCX was working on an IPO since 2008. However, it had to put off its plan due to poor market condition. The exchange had filed the DRHP for offer with the regulator in March. The offer for sale would be through a 100 percent book- building process, wherein not more than 50 percent of the net offer will be allocated on a proportionate basis to qualified institutional buyers. It would also stipulate that not less than 15 percent of the issue will be available to non-institutional bidders and not less than 35 percent of the issue will be offered to retail individual bidders. Edelweiss Capital, Citigroup Global Markets India and Morgan Stanley India Company are the book running lead managers to the offer. MCX Stock Exchange, which is owned by MCX and FTIL, is in a legal battle with SEBI after the regulator denied it permission to launch equity trading earlier this year. MCX is the sixth largest commodity exchange in the world. It offers futures trading in more than 40 commodities that include bullion, energy, ferrous and non-ferrous metals, oil and oil seeds, cereal and pulses. During August 1-15, MCX had a business turnover of 7,89,139 crore
Source: PTI