There is a rush among retail investors to bid for the public issue of Multi Commodity Exchange (MCX). While the Rs 633-crore-initial public offer (IPO) was subscribed 4.5 times, the retail category was subscribed 6.91 times on the second day on Thursday. The issue will close for subscription on February 24.
Usually, retail subscription comes on the final day of bidding. However, market experts say lack of IPOs in the past few months has resulted in a rush among retail investors to subscribe to the MCX issue.
The IPO so far received bids for 24.6 million shares against the issue size of 5.5 million equity shares, excluding anchor book, which saw subscriptions for Rs 95.6 crore worth of shares on Tuesday. The qualified institutional investor and non-institutional investor categories were subscribed 3.68 and 1.88 times respectively.
For the nine months ended December 31, 2011, MCX had total income of Rs 474 crore and net profit of Rs 220 crore. Given the company is looking at a valuation of over Rs 5,200 crore ($1.05 billion) at the upper end of the price band, it is seeking a PE multiple of around 18 times trailing net profit on an annualised basis. However, the money raised through the IPO will not go to the company as it is an offer for sale by the promoters. This is the biggest IPO since L&T Finance Holdings raised over Rs 1,200 crore in its maiden public float last July.