MCX sets price band at Rs860-1,032

Multi Commodity Exchange of India (MCX) on Thursday announced a price band of `860-1,032 for its initial public offer (IPO), which is slated to open on February 22 and close on February 24.

The offer is not a fresh issue of shares and merely allows seven existing shareholders to sell a part of their holding in the company — totalling 64.27 lakh shares, or 12.6% share — which would rake in `660.48 crore at the upper end of the price band.

These shareholders include promoter company Financial Technologies, besides the State Bank of India, Bank of Baroda, Corporation Bank, GLG Financials Fund, Alexandra Mauritius and ICICI Lombard General Insurance Co.

The shares will be listed on the Bombay Stock Exchange, making it the first exchange to be listed in India.

They will not be listed on the National Stock Exchange (NSE) immediately, MCX said on Thursday. MCX and NSE, which had over 95% market share in equities as of January end, have had differences in the past, including over NSE’s initial decision to offer free transactions in the currency derivatives segment, which MCX said was anti-competitive.

MCX is the largest commodity exchange in value terms, accounting for 86.10% of the market share in the segment, according to data from commodity market regulator, the Forward Markets Commission. It also has a 5% stake in MCX-SX, which offers a platform for trading in currency derivatives and has been mired in controversy.

Under stock exchange rules, ownership in MCX-SX is limited to 5% for ordinary stakeholders and 15% for specific financial institutions.

MCX-SX had tried to meet these obligations by reducing the paid-up capital and issuing warrants to its promoters.

However, the Securities and Exchange Board of India denied MCX-SX permission to start equity operations on the ground that it had not sought or obtained regulatory approval for the scheme used by it to comply with the regulatory requirements and rejected the application.