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Wednesday, Sep 28, 2005

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MCX plans Rs 330-cr IPO

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MCX will be the world's third commodity exchange and India's first exchange to be listed.

Mumbai , Sept. 27

MULTI Commodity Exchange of India Ltd (MCX) has decided to go in for an initial public offering (IPO). It will be the first commodity exchange in the country to be listed and third in the world.

Mr Jignesh Shah, Managing Director and Chief Executive Officer, MCX, one of the three multi-commodity exchanges in the country, said that the size of IPO would be around $75 million (Rs 330 crore).

The MCX board approved the IPO plan on September 24. The company has appointed Citigroup, DSP Merrill Lynch and Kotak Mahindra as merchant bankers to the issue, Mr Shah told newspersons here on Tuesday.

The plan is to come out with the issue in early-2006. "We expect large-scale participation from retail and institutional investors and will announce the IPO details after necessary regulatory compliances," Mr Shah said.

"After Chicago Mercantile Exchange of the US and Sydney Futures Exchange, Australia, MCX will be the world's third commodity exchange and India's first exchange to be listed," he said.

"These two exchanges command a price-earning ratio of around 40 and their growth is 10 per cent a year". He, however, declined to comment on the pricing of the issue, as it will be decided by merchant bankers.

IPO to fund expansion: The IPO is aimed to raise funds for the expansion plans of the exchange. This includes investment in warehouses and technology, Mr Shah said.

The exchange would grow at 100 per cent rate in the next five years and would offer many more commodities and their derivatives in the near future, he said.

The exchange, with a paid-up capital of Rs 37 crore, is promoted by Financial Technologies India Ltd (FTL). The stock price of FTL was quoted at Rs 1,310 on Tuesday on BSE.

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