ICICI Emerging Sectors Fund has sold 1.56 per cent stake in commodity bourse company Multi Commodity Exchange of India (MCX) for Rs 106.8 crore after MCX made its debut on Friday. The shares had been sold at 59 per cent gain for an investment made in November 2007.
However, the fund did not sell shares in the Rs 663 crore IPO of MCX, which included share sale by more than half-a-dozen shareholders, including its promoter Financial Technologies (India) Ltd.
According to an earlier report, ICICI Emerging Sectors Fund is managed by ICICI Venture Funds Management Company Ltd, although it is not currently listed on its website. An e-mail query sent to ICICI Venture did not get any immediate response.
The fund held 2.65 per cent stake or 1.35 million shares in MCX, the first Indian exchange to get listed. It picked up the stake in 2007 from MCX promoter Financial Technologies for Rs 130 crore. The shares were acquired at an average cost of Rs 840 a unit and some shares were sold in 2009 to Bennett, Coleman and Co. Ltd for Rs 16.7 crore at cost.
With the current transaction, ICICI Emerging Sectors Fund has nearly taken out its principal investment amount. As per Friday’s closing price of MCX, the fund’s remaining shares are valued at Rs 72 crore.
On Friday, the fund sold part of its stake on the National Stock Exchange for Rs 1334.88 a unit. The share price of MCX closed at Rs 1,297.05, up 25.68 per cent on the BSE on Friday, after rising to Rs 1,426 in the initial hours of trading.
On Monday, shares of MCX were trading at Rs 1,293 a unit on the BSE at 12:15 pm, down 0.31 per cent.
“MCX competes directly with four other national level commodity exchanges in India, namely, NCDEX, NMCE, ICEX and ACE. However, its product portfolio, reach and market share are much ahead of the competition. While , at present valuation, trades at 18x annualised earnings, its peers in the region (like Hong Kong Exchange and Singapore Exchange) trade at 24x-26x on CY12 earnings, with margins in the range of 55-60 per cent and have growth rate of 10-15 per cent,” an IPO report by brokerage Ventura Securities stated.
Besides being the first bourse in India to get listed, the issue was also unique as it comprised only sale of shares and no money was being raised for the company. The issue involved sale of 12.6 per cent stake by promoter shareholder Financial Technologies. Others who sold their stake included the State Bank of India (Equity), GLG Financials Fund, Alexandra Mauritius Ltd, Corporation Bank, ICICI Lombard General Insurance Company and Bank of Baroda.
For FY11 and the nine months ended December 31, 2011, MCX’s total consolidated income was Rs 447.56 crore and Rs 474.50 crore, respectively, with net profit Rs 176.27 crore and Rs 217.95 crore, respectively. The total value of the commodity futures contracts traded on the MCX exchange in the nine months ended December 31, 2011, stood at Rs 11,980,689 crore.