India’s largest commodity exchange Multi Commodity Exchange of India (MCX) plans to come up with an IPO soon. An announcement is expected in a week, reports The Economic Times. It may sell about 10 per cent of the company to raise about Rs 500-600 crore. The report further added that the issue will be managed by DSP Merrill Lynch, Kotak Securities and Enam Financial.
Some of the foreign investors will pare their holdings in MCX. They own about 24 per cent in the commodity exchange, in which the majority stake is owned by Financial Technologies. Fidelity holds 9 per cent, Merrill Lynch and Citi own 5 per cent each. The other investors include US-based Passport Capital with 3 per cent and UK’s GLG Capital Partners with 2 per cent. Recently a host of domestic institutions such as ICICI, IL&FS and Kotak acquired 3.55 per cent, 5 per cent and 1 per cent, respectively, in the firm. They valued MCX at $1.1 billion.

FDI In Commodity Exchanges
Meanwhile foreign strategic investors like New York Stock Exchange (NYSE) and the New York Mercantile Exchange (NYMEX), who want to acquire stakes in MCX, are awaiting policy guidelines on FDI in commodity exchanges. Another report says the guidelines on this are not expected before March this year. The government may want to allow as much FDI as is allowed in stock exchanges — a maximum 26 per cent FDI and 23 per cent from foreign institutional investors (FII). The restriction on the holdings by any single entity was also expected to be the same — no single FII or FDI entity to hold more than 5 per cent stake in such exchanges.

Posted on 12/31/07, 10:23 AM
in: Capital Markets
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