Date:15/06/2006 URL: http://www.thehindubusinessline.com/2006/06/15/stories/2006061504650100.htm

Back SEBI clears MCX IPO

Rajesh Abraham

Exchange going ahead with issue despite weak markets

Mumbai , June 14

The Securities and Exchange Board of India has cleared the initial public offering (IPO) of commodity exchange MCX Ltd. When listed, MCX would be the country's first exchange to do so, joining a select few globally in that league.

Mr Jignesh Shah, CEO and Managing Director of MCX Ltd, said that the exchange is going ahead with the issue despite the weak market sentiment. The company received SEBI's consent at the end of last week.

He said the exact price band for the issue would be finalised only after discussions with the merchant bankers of the issue, which include Citigroup, DSP Merrill Lynch and Kotak Mahindra.

The company is sticking to the original size of 50 lakh shares through the IPO. As per the original plan, the company hopes to mobilise about Rs 300 crore through the IPO, which would put the issue price in the region of Rs 600 per share. Though Mr Shah did not reveal the exact timing of the IPO, he said the company "will not defer" it.

On the issue price, he said: "We are not asking for too much (from the investors)." He pointed out that leading global fund house Fidelity had taken a 9.24 per cent stake in the company at Rs 600 per share. "Fidelity's stake has one-year lock-in arrangement," Mr Shah said.

Financial Technologies (India) Ltd, a listed entity, is the promoter of MCX. Its stake in MCX will come down to 53.75 per cent from 64.30 per cent after the IPO. Several other public sector banks including State Bank of India and its associate banks, Nabard and the National Stock Exchange also hold stakes in the company.