MCX IPO plan sees signs of revival
Decisions on the ownership structure and foreign direct investment (FDI) in commodity exchanges may revive the proposal for IPO of Multi Commodity Exchange (MCX). The exchange — promoted by Financial Technologies (India) Limited — had dropped its IPO plan in end 2006, primarily due to lack of clarity on these issues.
While FDI guidelines are now due to be cleared by the Cabinet Committee of Economic Affairs, Forward Markets Commission is expected to submit the proposal for ownership structure before the Union ministry of consumer affairs this week.
When contacted MCX sources admitted that decisions in these regard would pave way for IPO. However, they did not comment on the timing of the issue.
MCX submitted the draft red herring before SEBI in March 2006 and received the due approval for IPO in June 2006. The issue size was pegged at 50 lakh shares. Post the promoter’s stake was slated to come down to 53.75 per cent.
While everything was perfectly in order, a SEBI regulation towards de-mutualisation of capital market, limiting the stake-holding of a single entity in the stock market to five per cent. As a spin-off effect a debate broke out on the ownership pattern of commodity exchanges and well as FDI in these exchanges. The stalemate in the following days did limit investor’s interest in Indian commodity exchanges.
