Riding high on a record-breaking demand from retail, institutional and HNI investors, the Multi Commodity Exchange's (MCX) initial public pffer (IPO) got subscribed by more than 54 times today and attracted bids worth about Rs 36,000 crore.
The first ever public offer by an Indian exchange has also emerged as the most successful IPO in about four years.
In terms of demand from retail investors, the MCX IPO is believed to have surpassed all previous records, as the shares reserved for the retail shareholders was subscribed nearly 24 times -- higher than any public offer so far.
Overall, the MCX IPO, which happens to be the first for the year 2012, got subscribed by 54.09 times on the last day of bidding -- thus attracting the highest subscription level since Anil Ambani-led Reliance group's Reliance Power (R-Power) IPO in January 2008, which was subscribed nearly 73 times.
So far, the Mundra Port & SEZ IPO in November 2007 is the most subscribed IPO of Indian market at 115 times, while MCX is probably the third most subscribed public offer in the Indian capital market's history.
The subscription level for retail segment was, however, lower at about 14% in both R-Power and Mundra Port IPOs. In the HNI segment also, the demand for MCX IPO at 150 times is only next to R-Power's 190 times.
The portion reserved for institutional investors in MCX IPO has got subscribed 50 times, while the HNIs (High Networth Individual Investors) have submitted bids for over 150 times of the number of shares reserved for them.
The last highly successful IPO was of Coal India in October 2010, which got subscribed 15 times overall, but the retail portion was subscribed only about two times.
The shares are alloted on the basis of subscription levels in different segments after all the bids are received.
The bidding for the MCX IPO began on February 22 and closed today in a price band of Rs 860-1,032 per share, which could raise Rs 663 crore at the top end of the price-band.
Out of this, shares worth nearly Rs 100 crore have already been allocated to 12 anchor investors and the remainder of about 5.5 million shares are being sold to the public investors. However, it has attracted bids for nearly 300 million shares, creating demand worth about Rs 36,000 crore.
Post its listing, MCX could have lakhs of retail investors as its shareholders of MCX unlike other exchanges which have majority stake with foreign and private entities.
Experts said that the robust demand for MCX IPO could also lead to other exchanges getting listed and help revive the primary market.
Brokerage firm SMC Global, a syndicate member for the offer, said that the MCX IPO has brought the much-needed smile on the face of the capital market and the IPO segment, which has remained grim for the past two years.
The applications continued to come in even after the deadline of 5 pm for the closure of the IPO this evening and the investment bankers sought extension of time for acceptance of the bids.
"Almost in all the metrics, MCX IPO has proved to be successful," SMC Global's Jagannaadham Thunuguntla said, while adding that the offer generated demand worth about Rs 36,000 crore ($7.3 billion).
"The participation is seen from all the investor classes," he said, while adding that the issue could help revive the positive sentiments could spill over to the overall IPO segment and the secondary market as well.
"What Maruti IPO did in 2003 in helping the historic revival of the Indian capital markets, may be expected to be repeated by MCX IPO in 2012," he added.
Maruti IPO was overall subscribed 9 times way back in 2003, while its retail segment was subscribed 2.5 times -- which was one of the best at that time.
The MCX offer was subscribed 91% on the first day itself, while it was fully covered in early morning bidding on the second day.
In an unprecedented development, the retail portion of the IPO was fully subscribed before the other segments and by the second day more than half of the demand had come from retail investors and the rest from others.
The promoters FTIL currently holds 31.2% in MCX, which would come down to about 26% after the IPO.
FTIL, SBI, Bank of Baroda, GLF Financials Fund, Alexandra Mauritius Ltd, Corporation Bank and ICICI Lombard General Insurance are the investors divesting part of their holdings in MCX through the public offer.
