Multi Commodity Exchange of India (MCX), an independent, de-mutualised association facilitating nationwide online trading, clearing and settlement operations of commodities futures transaction, has filed its DRHP with SEBI on February 18, 2008 to enter the capital market with an IPO of 1 crore equity shares of Rs 5 each, at a price to be determined at a later stage through the 100% book building process.
The issue consists of fresh issue of 60 lakh equity shares and an offer for sale of 40 lakh equity shares by Financial Technologies India (FTIL) and Corporation Bank. The issue comprises a net issue of 90 lakh equity shares to the public, a reservation of upto 2.50 lakh equity shares to the existing FTIL shareholders, a reservation of upto 5 lakh equity shares to the employees of the company and a further reservation of upto 2.50 lakh equity shares to business associates. The issue would constitute 11.88% of the post issue, paid up equity capital of the company.
The company proposes to list the shares on BSE and NSE.
The BRLMs to the issue are DSP Merrill Lynch, Kotak Mahindra, Citigroup Global, Enam Securities, JM Financial and Karvy Computershare.
The company intends to use Rs 50 crores out of the issue proceeds to finance the setting up of a Commodity Ecosystem Infrastructure; Rs 100 crores for equity investments in Clearing Corporation set up by MCX; expansion of the information technology infrastructure of the exchange and Rs 25 crores for strategic investments and acquisitions and for general corporate purposes.
The Multi Commodity Exchange, promoted by Financial Technologies India, was incorporated in April 2002. It received recognition from the government in September 2003. Online futures trading commenced on MCX in November 2003.
The total value of contracts traded on the exchange between April 1, 2006 to March 31, 2007
was approximately Rs. 22,93,723 crores and from April 1, 2007 to December 31, 2007, the total value of contracts traded was Rs. 20,58,493 crores. This amount represented approximately 75.77% of the market share of the Indian commodities futures industry in terms of the value of commodities traded in futures markets during that period. As of December 31, 2007, the exchange offered futures trading in 55 commodities, from various market segments including bullion, energy, ferrous and non-ferrous metals, oils and oil seeds, cereals, pulses, plantations, spices, plastics and fibers.
The exchange received non-promoter equity participation for the first time in May 2004 when Bank of India, Union Bank and Corporation Bank invested in the Equity Shares of the exchange. Since then, it received equity participation from various banks and financial institutions, including State Bank of India, ICICI Bank, Bank of Baroda, Canara Bank, HDFC Bank, NSE and NABARD. Fidelity Funds (Mauritius) also invested into the company by subscribing to 3,600,000 Equity Shares. Recently, FTIL sold 3,907,540 shares each to Citigroup Strategic Holdings Mauritius and Merrill Lynch Holdings (Mauritius).
For the year ended March 31, 2007, the company posted an income of Rs 206.33 crores and a net profit of Rs 93.04 crores as against income of Rs 104.39 crores and net profit of Rs 45.64 crore in FY06. For nine month period ended December 31, 2007, the company's income was Rs 158.31 crores and net profit was Rs 54.75 crore as against an income of Rs 137.37 crores and net profit of Rs 60.25 crores for the corresponding period of the previous year.