Team CrawFin/ Harshal Jawale, CFPCM
The Multi Commodity Exchange (MCX), India's biggest commodity exchange by turnover is entering the market with an offer for sell from existing investors like FTIL, SBI, Corp Bank etc. Incorporated in 2003, MCX is the largest among these and have above 80% of the market share of the Indian commodity futures exchange industry. It allows trading in more than 50 commodities across sectors like bullion, metals, energy, weather, and agricultural products. MCX has more than 2,107 registered members operating through over 180,000 trader work stations in over 1,139 cities across India. MCX emerged as the 5th largest exchange in the world.
Issue Details –
Open – Feb 22, 2012 – Feb 24, 2012
Price band – INR 860 – INR 1032
Market Lot – 6 Shares
Size – INR 552 Cr – INR 663 Cr
CRISIL Rating – 5/5
Valuation post listing (Assuming issue close at higher price i.e. 1032)
Market Capitalization – INR 5200 Cr Approx
P/BV – 5 times
PE – 18 times (FY12 earning expected at 57)
CAGR – 33% for last 5 years; Expected growth is CAGR 25% for next 3 years
Cash in hand – INR 700 Cr
Dividend yield – 1% expected
Considering all the existing valuation parameters I feel IPO is priced at par. Yet its market leadership, nascent stage of commodities market in country like India, its future plans of entering into equity segment and consistent addition of new products will find high growth in near future. I recommend subscribe to IPO as a good value portfolio addition but do not expect bumper listing.
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