MCX IPO subscribed 54 times; gets bids worth Rs36,000 crore

The MCX IPO, which happens to be the first for the year 2012, got subscribed by 54.09 times on the last day of bidding—thus attracting the highest over-subscription level since the Anil Ambani-led Reliance group’s R-Power IPO in January 2008, which was subscribed nearly 73 times

New Delhi: Riding high on a record-breaking demand from retail, institutional and high networth individual (HNI) investors, the initial public offer (IPO) of the country’s top commodity bourse Multi Commodity Exchange (MCX) got over-subscribed by more than 54 times on Friday and attracted bids worth about Rs36,000 crore, reports PTI.

The first ever public offer by an Indian exchange has also emerged as the most successful IPO in about four years.

In terms of demand from retail investors, the MCX IPO is believed to have surpassed all previous records, as the shares reserved for the retail shareholders was over-subscribed nearly 24 times—higher than any public offer so far.

Overall, the MCX IPO, which happens to be the first for the year 2012, got subscribed by 54.09 times on the last day of bidding—thus attracting the highest over-subscription level since the Anil Ambani-led Reliance group’s R-Power IPO in January 2008, which was subscribed nearly 73 times.

So far, the Mundra Port & SEZ IPO in November 2007 is the most subscribed IPO of Indian market at 115 times, while MCX is probably the third most over-subscribed public offer in the Indian capital market’s history.

The over-subscription level for retail segment was, however, lower at about 14% in both R-Power and Mundra Port IPOs. In the HNI segment also, the demand for MCX IPO at 150 times is only next to R-Power's 190 times.

The portion reserved for institutional investors in MCX IPO has got over-subscribed 50 times, while the HNIs have submitted bids for over 150 times of the number of shares reserved for them.

The last highly successful IPO was of Coal India in October 2010, which got subscribed 15 times overall, but the retail portion was subscribed only about two times.

The shares are allotted on the basis of subscription levels in different segments after all the bids are received.

The bidding for the MCX IPO began on 22nd February and closed on Friday in a price band of Rs860-Rs1,032 per share, which could raise Rs663 crore at the top end of the price-band.

Out of this, shares worth nearly Rs100 crore have already been allocated to 12 anchor investors and the remainder of about 55 lakh shares are being sold to the public investors.

However, it has attracted bids for nearly 30 crore shares, creating demand worth about Rs36,000 crore.

Post its listing, MCX could have lakhs of retail investors as its shareholders of MCX unlike other exchanges which have majority stake with foreign and private entities.

Experts said that the robust demand for MCX IPO could also lead to other exchanges getting listed and help revive the primary market.

Brokerage firm SMC Global, a syndicate member for the offer, said that the MCX IPO has brought the much-needed smile on the face of the capital market and the IPO segment, which has remained grim for the past two years.

The applications continued to come in even after the deadline of 5 pm for the closure of the IPO this evening and the investment bankers sought extension of time for acceptance of the bids.

“Almost in all the metrics, MCX IPO has proved to be successful,” SMC Global’s Jagannadham Thunuguntla said, while adding that the offer generated demand worth about Rs36,000 crore ($7.3 billion).

“The participation is seen from all the investor classes,” he said, while adding that the issue could help revive the positive sentiments could spill over to the overall IPO segment and the secondary market as well.

“What Maruti IPO did in 2003 in helping the historic revival of the Indian capital markets, may be expected to be repeated by MCX IPO in 2012,” he added.

Maruti IPO was overall subscribed 9 times way back in 2003, while its retail segment was subscribed 2.5 times—which was one of the best at that time.

The MCX offer was subscribed 91% on the first day itself, while it was fully covered in early morning bidding on the second day.

In an unprecedented development, the retail portion of the IPO was fully subscribed before the other segments and by the second day more than half of the demand had come from retail investors and the rest from others.

The promoters FTIL (Financial Technologies India) currently holds 31.2% in MCX, which would come down to about 26% after the IPO.

FTIL, SBI, Bank of Baroda, GLF Financials Fund, Alexandra Mauritius, Corporation Bank and ICICI Lombard General Insurance are the investors divesting part of their holdings in MCX through the public offer.

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Tata Motors plans to sell 5,000 Sumo Gold each month

The Bharat Stage III version of Tata Sumo Gold is priced at Rs5.47 lakh (ex-showroom, Chennai) and the top end variant at Rs6.89 lakh (ex-showroom, Chennai)

Aiming to be a leading player in the entry-level utility vehicle segment, auto major Tata Motors plans to sell 5,000 units of its latest ‘Sumo Gold’ each month over the next two months.

The new variant, cheaper by Rs40,000 than existing models is equipped with a new Tata-owned CR4 engine providing much better refinement and mileage, Tata Motors utility vehicles product group—head Ashesh Dhar said.

“We have cut the price by up to Rs40,000. The vehicle’s weight has been reduced, it has an improved CR4 engine delivering better mileage of 14.3 kmpl and pick up at 85 bhp. We have added new external and internal features in it,” he told reporters after unveiling the Sumo Gold.

He said the company aims to be a significant player in this segment with introduction of Sumo Gold. “Currently, Sumo sells about 3,000 units per month. Four months back, we were selling only 1,100 units. We have increased the volumes. Now we plan to sell 5,000 units in another two months," he said. On producing Sumo Gold at their Pune plant, he said production is currently 3,000 units and can be ‘ramped’ up as and when required. He replied in the negative when asked, if sales of the company’s premium crossover ‘Aria’ has been hit after entry of competitor Mahindra’s XUV500 into the market and said demand was actually more.

“No. It was not. We were selling only 200 units. Now we are selling about 500 units [of Tata Aria]. It has been increasing,” he later told PTI.

The Bharat Stage III version of Tata Sumo Gold is priced at Rs5.47 lakh (ex-showroom, Chennai) and the top-end variant at Rs6.89 lakh (ex-showroom, Chennai).
The BS IV model is priced at Rs5.62 lakh (ex-showroom, Chennai) for the base variant while the top end model is Rs7.03 lakh (ex-showroom, Chennai).

Tata Motors’ shares closed at Rs265.40 per share on the Bombay Stock Exchange, 1.14% down from the previous close.

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CCI okays Tata Power's buyout of BP stake in solar JV

“The proposed acquisition of further 51% of the equity share capital of Tata BP Solar and other securities, if any, by Tata Power is not likely to create any adverse competition concern...” CCI said while approving the buyout

The Competition Commission of India has approved the proposal of Tata Power to acquire remaining 51% stake in Tata BP Solar from joint venture partner BP Alternative Energy Holdings.

In an order, the CCI noted that TPCL (Tata Power) and TBCL (Tata BP Solar) are not engaged in production, supply, distribution, storage, sale or trade of “similar or identical or substitutable goods or provision of services”.
 
“The proposed acquisition of further 51% of the equity share capital of TBSL and other securities, if any, by TPCL is not likely to create any adverse competition concern... The Commission hereby approves the proposed combination under Section(1) of section 31 of the Act,” it said.

The CCI further said that while TBSL is concentrated mainly on the manufacturing and development of solar energy related business, like solar modules and solar cells, TPCL is engaged in generation, transmission and distribution, and trading of power.

“Their individual or combined share in the markets involving engagement at different stages or levels of production chain is also not substantial,” CCI noted.

In December last year, Tata Power had announced it would acquire the remaining 51% stake in the joint venture. On completion of transaction, Tata Power will own 100% of the company, it had said. Tata Power and BP have agreed that the company will continue to enjoy access to certain BP technology until 2013. The company and BP will enter into a technology agreement to give effect to this understanding, Tata Power had said.

Tata Power’s shares closed at Rs113.40 per share on the Bombay Stock Exchange, 1.52% up from the previous close.

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