22nd Feb 2012 Wednesday
The initial public offer of the Multi Commodity Exchange of India (MCX) offers retail investors an opportunity to become a part of India's growing commodity trading business at reasonable pricing. The company is the leader in its industry with a robust business model, a strong balance sheet and consistently high cash flows without any major capex in future. Investors are advised to subscribe to the IPO.
Seven of the existing shareholders of the company, including the promoter Financial Technologies (FTIL), will be selling a total of 64.3 lakh shares. MCX won't be issuing any shares and hence no proceeds would accrue to the company.
The company represents a high-cash generating, low-capex business and is debt free. Its net worth stood at around Rs 1,073.9 crore as on December 31, 2011. Out of this nearly Rs 700 crore is cash or investments.
MCX posted a net profit of Rs 218 crore in the nine months to December 2011. On an annualised basis, this translates into a price-to-earnings multiple (P/E) of 15.1 to 18.1 depending on the lower and upper IPO price bands. Similarly, the IPO band is 4.1 to 4.9 times the book value of MCX shares as on December 31, 2011
Seven of the existing shareholders of the company, including the promoter Financial Technologies (FTIL), will be selling a total of 64.3 lakh shares. MCX won't be issuing any shares and hence no proceeds would accrue to the company.
The company represents a high-cash generating, low-capex business and is debt free. Its net worth stood at around Rs 1,073.9 crore as on December 31, 2011. Out of this nearly Rs 700 crore is cash or investments.
MCX posted a net profit of Rs 218 crore in the nine months to December 2011. On an annualised basis, this translates into a price-to-earnings multiple (P/E) of 15.1 to 18.1 depending on the lower and upper IPO price bands. Similarly, the IPO band is 4.1 to 4.9 times the book value of MCX shares as on December 31, 2011
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