MCX IPO Subscribed 53x On The Last Day Of Subscription

Multi-Commodity Exchange of India (MCX), which opened on February 22, 2012 for subscription, has received an astonishing response from the retail as well as institutional investors with it getting over-subscribed by 53 times with bids of over Rs 29,000 crore. The kind of response that this IPO has received was seen at the time of Reliance Power’s IPO which was subscribed by 73 times in January 2008. Coal India too was subscribed by 12 times in October 2010.

The portion that is reserved for the retail investors has been over-subscribed by 24.14x. The institutional portion got subscribed by 49.12x while the non-institutional portion got a whooping response as it was subscribed by 150.35x. However it must be noted that the employee portion got subscribed by merely 0.18x.

The response for the MCX IPO from the investors has been very strong in the aftermath of a scary performance by markets in the year 2011, where many companies either pulled out their IPOs due to subdued market conditions or were involved in alleged scams. Readers must note that the confidence in the MCX IPO is very strong at present and is quoting a premium of Rs 335-340 per share on listing day.

Market sources have also added that along with the anchor investors most retail and institutional investors have submitted their bids at the upper end of the price band which may result into the IPO being listed at higher band Rs 1032. This would mean that company would raise Rs 663 crore.

However, as stated in our earlier updates on the IPO we continue to recommend our readers to subscribe to the IPO with a view to enjoy listing day gains, but thereafter we advise caution as we await clarity on the future sustainability of its business model.

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