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MCX IPO may revive primary market: Experts

The MCX IPO, estimated to raise Rs663 crore, also happens to be the first public offer of 2012 in the Indian market and had got over-subscribed more than two-times by the afternoon trade on the second day of issue today

New Delhi: Top commodity exchange Multi Commodity Exchange’s (MCX) ongoing initial public offer (IPO), the first ever by an Indian bourse, might mark the revival in sentiments for the primary market after a months-long dry period, reports PTI.

The MCX IPO, estimated to raise Rs663 crore, also happens to be the first public offer of 2012 in the Indian market and had got over-subscribed more than two-times by the afternoon trade on the second day of issue today.

The offer has already attracted bids worth over Rs1,300 crore and the bidding would continue till tomorrow.

“The issue has a potential of opening up the IPO market.

The MCX offer has invoked lot of interest in the market, but whether the revival will be able to sustain or not depends on the quality of IPOs that would come in the future,” Unicon Financial Solutions CEO Gajendra Nagpal said.

The company has shown tremendous growth over the last few years and the quality of issue looks very good,” he added.

In the broader market, the BSE barometer Sensex has surged by 17% so far this year and going by the bullish sentiments looks like it is a good time to do an IPO, he said.

There is always demand for the companies with healthy financials and a good background, analysts believe.

“It marks the revival of the IPO market and it is good to see a quality and credible company in the market after a long time.

“Secondary market momentum is also helping the company’s issue and there are very good chance that the success of this IPO will spill over and result into some more initial share sales,” SMC’s Jagannadham Thunuguntla said.

Brokerage house Angel Broking said, “We believe MCX being the only major commodity exchange in India and the world’s fifth largest exchange can witness strong growth in revenue and profitability going ahead, which makes its valuation much more attractive than global peers.”

The first ever public offer by an Indian bourse also indicated towards an end to a long-running lull in the primary market, which has remained mostly weak for many months now.

At the top-end of the price band, the IPO could raise Rs663 crore, out of which close to Rs100 crore have already been raised through sale of about 9.27 lakh shares to 12 anchor investors earlier this week.

Market experts also said that investor response to MCX IPO may decide path for other IPOs, as well.

For the markets in general, the MCX IPO is perhaps the first big issue since Coal India and MOIL in the recent times.

Lot of companies had pulled out IPOs last year after the benchmark Sensex plunged by 25%.

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