TWITTER IPO : SOME INTERESTING DETAILS !!!

Twitter : Twitter lists today. Issue price $ 26. 

At the current price of $46.00 and 705 million fully diluted shares, Twitter has a market cap of $32.4 billion. 

474,696,816 current shares 

42,708,824 options 

85,657,603 RSUs outstanding as of 9/30/13 

116,512 convertible preferred 

7,202,952 RSUs granted after 9/30/13 

13,178,040 stock issued for MoPub acquisition 

1,237,847 options issued for MoPub acquisition 

80,300,000 stock reserved for equity compensation plans

705,098,594 Total Shares 

$46.00 Current price 

$32,434,535,324 Valuation

Credit Analysis and Research Ltd IPO : A MUST SUBSCRIBE !!!

Price Band: Rs. 700 - Rs. 750.

Retail Discount : NA .

Face Value: Rs.10.

Minimum Lot Size: 20 Shares.

Issue opens on: 07th December 2012, Friday.

Issue closes on: 11th December 2012, Tuesday.

Listing Date on: by 21st December 2012.

Total No. of Shares offered: 71,99,700  shares or 25.22 %

Employee Reservation: NA.

Net Public Offer: 6,61,15,000 shares.

QIB Book: 35,99,850 shares or 50 % of issue.

Non – Institutional Bidders: 10,79,955 shares or 15 % of issue.

Retail Book: 25,19,895 shares or 35 % of issue.

Equity Shares outstanding prior Issue: 2,85,52,812 shares.

Equity Shares outstanding post Issue: 2,85,52,812 shares.

Total Size of the Issue: Rs. 503.97 Crs - Rs. 539.97 Cr.

IPO GRADING: Exempted for Grading by SEBI.

KEY FINANCIALS (Consolidated)	31 Mar 2009	31 Mar 2010	31 Mar 2011	30 Sept 2012 6 month
Total Income (Rs. Crs)	103.15	153.79	176.62	104.00
Net Profit (Rs. Crs)	54.67	87.04	91.05	49.76
Net Profit Margin (%)	53.00	56.59	51.55	47.84
EPS (Rs.)	19.15	30.49	31.89	17.43

CREDIT ANALYSIS AND RESEARCH LIMITED : Credit Analysis & Research Ltd (CARE) was incorporated in 1993. CARE is the second largest full service credit rating company among six players in India. They offer rating and grading services across a diverse range of instrument and industries including IPO grading and grading of various types of enterprises, including shipyards, maritime training institutes, construction companies and rating of real estate projects among others. They also provide general and customized industry research reports. It is also has international presence in Maldives, Nepal, Mauritius, Hong Kong, Eucador, Mexico & has non-binding MOU with credit rating agencies in Brazil, South Africa, Malaysia & Portugal. CARE is professionally managed has no identifiable promoter & its existing share holders include domestic banks and financial institutions such as IDBI Bank, Canara Bank, SBI and IL&FS etc. Company's list of clients includes banks and other financial institutions, private sector companies, central public sector undertakings, sub- sovereign entities, Small and Medium Enterprises ("SMES") and micro-finance institutions. They are also leading credit rating agency in India for IPO grading having graded the largest number of IPOs since the introduction of IPO grading in India. CARE ratings has completed over 19,069 rating assignments as of September 2012 since its inception in April 1993. It has a rating relationships with 4,644 clients as o 30th September 2012.

CARE, being a credit rating company in India, is exempted by SEBI from obtaining IPO grading for its Initial Public Offer. None of the rating companies including CRISIL, FITCH or ICRA graded CARE IPO.

Valuations:

The company has fixed the price band at Rs. 700-750 per share. Based on FY12 annual EPS of Rs. 40.55, CARE will be trading at P/E range of 17.27 x to 18.5 x. This is at a significant discount to peers like ICRA & CRISIL which are trading at 27 x and 35 x respectively. For FY12 the consolidated revenues from operation stood at Rs. 190 Cr with Net Profit of Rs. 116 Cr resulting in Net Margin of 61.05 % with EPS of Rs. 40.55 CARE has consistently maintained high PAT margin of 53 % with strong ROE of 34 %. It is a debt free company. 85 % of its revenue comes from ratings business. At the IPO price the P/E is in range of 17.27 x to 18.5 x & P/B is in the range of 5.3 x to 5.6 x. Net worth o the company as on 3oth September 2012 is Rs. 427 Cr with Book Value of Rs.  149/share. Company has cash equivalents of Rs. 260 Cr. CARE is expected to post FY13 profit of around Rs. 100 Cr which can lead to EPS of close to Rs. 35. 

Retail Investors can subscribe up to maximum of Rs. 2,00,000 per application. CARE has strong financial position and is high cash-generating business and which is available at very reasonable valuations.

The object of the offer is to carry out sale of 71,99,700 Equity share by selling shareholders & to achieve the benefits of listing the Equity Shares on the Stock Exchanges. The Promoters will dilute 25.22 % of their holding in the company through the stake sale. The company CARE will not receive any proceeds from the offer and all proceeds will go to selling shareholders.

Out of the Offer of a total of 71,99,700 equity shares -  24,54,400 equity shares are being offered by IDBI Bank; 21,71,200 equity shares are being offered by Canara Bank. 9,14,500 equity shares are being offered by SBI; 8,55,500 equity shares are being offered by IL&FS; 5,84,100 equity shares being offered by Federal Bank. 58,605 equity shares being offered by IL&FS Trust held on behalf of Milestone Fund. 1,395 equity shares being offered by Milestone Trusteeship held on behalf of Milestone Army Trust; 60,000 equity shares being offered by ING Vysya; 1,00,000 equity shares being offered by TATA Investment. 

The Equity Shares being offered by the Selling Shareholders under the Offer have been held by such Selling Shareholders for a period of more than one year prior to filing of the Draft Red Herring Prospectus with SEBI. CARE has mandated six bankers for managing the IPO, with Karvy Computershare Private Limited as its registrar & DSP Merrill Lynch Ltd as lead banker, other bankers managing the share sale are Edelweiss Capital Limited, ICICI Securities Limited, IDBI Capital Market Services Limited, Kotak Mahindra Capital Company Limited, SBI Capital Markets Limited. 

According to me one should look for subscribing for CARE IPO, having 85 % o its revenue coming from rating business which earns better margins is thus being offered to public at very attractive valuation. CARE will be third listed company after CRISIL & ICRA - the rating agencies India Ratings (formerly Fitch), Brickworks & SME rating are unlisted. CARE can have Market Cap of around Rs. 2,141.46 Cr with cash of Rs. 260 Cr which brings its Enterprise Value of around Rs. 1,881.46 Cr at an Upper band of Rs. 750. 

Thus, with attractive pricing & strong fundamentals with good institutional holdings the Long term investors should look into subscribing the IPO for good opportunity. Short term investor can subscribe for listing gains.

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

VIEW THE POWER POINT PRESENTATION ON

RETURN ON CAPITAL

BHARTI INFRATEL LTD : GO FOR LISTING GAINS !!!

Price Band: Rs. 210 - Rs. 240.
Retail Discount : 5.00 % .

Face Value: Rs.10.
Minimum Lot Size: 50 Shares.

Issue opens on: 11th December 2012, Tuesday.

Issue closes on: 14th December 2012, Friday.

Listing Date on: by 24th December 2012.

Total No. of Shares offered: 18,89,00,000  shares or 10.00 %

Employee Reservation: NA.

Net Public Offer: 6,61,15,000 shares.

QIB Book: 9,44,50,000 shares or 50 % of issue.

Non – Institutional Bidders: 2,83,35,000 shares or 15 % of issue.

Retail Book: 6,61,15,000 shares or 35 % of issue.

Equity Shares outstanding prior Issue: 174,24,08,730 shares.

Equity Shares outstanding post Issue: 188,86,42,842 shares.

Total Size of the Issue: Rs. 3,966.90 Crs - Rs. 4,533.60 Cr.

IPO GRADING: 4/5 - CRISIL – Strong Fundamentals.

KEY FINANCIALS (Consolidated)	31 Mar 2010	31 Mar 2011	31 Mar 2012	30 Jun 2012
Total Income (Rs.Cr)	7,038.73	8,508.11	9,452.06	2,416.50
Net Profit (Rs. in Cr)	252.97	551.48	750.73	213.07
Net Profit margin (%)	3.59	6.48	7.94	8.81
EPS (Rs.)	1.519	3.160	4.299	1.220
Net Asset Value (Rs.)	234.60	241.00	250.10	252.80
Net Worth (Rs. Cr)	13,627.57	13,994.92	14,524.21	14,682.39
RoNW (%)	1.90	3.90	5.20	1.50

BHARTI INFRATEL LIMITED: Bharti Infratel was incorporated in 2006 and is based in   Gurgaon, India as a subsidiary of Bharti Airtel ltd, a leading global telecommunications company which currently has operations in 20 countries across Asia and Africa. Bharti Airtel and Bharti Infratel are a part of the Bharti group, one of India’s leading business conglomerates, with business interests in the telecommunications, real estate, insurance and retail sectors pioneered by Sunil Mittal. Bharti Infratel Ltd provides passive telecom infrastructure services. The company owns, deploys, and manages telecom towers and communication structure for telecom operators & wireless service providers. It currently has operation in 18 Indian states. In January 2008, Bharti Airtel transferred its towers to Bharti Infratel through a scheme of arrangement effective as of January 31, 2008. As of June 30, 2012, Bharti Airtel held 86.1 % of the equity share capital of Bharti Infratel, while the remaining 13.9 % was held by certain private equity investors. Bharti Infratel is one of the largest providers of tower and related infrastructure in India, based on the number of towers that Bharti Infratel owns and operates and the number of towers owned or operated by Indus that are represented by Bharti Infratel’s 42 % equity interest in Indus. Bharti Infratel, has more than 33,000 mobile phone masts, also holds a 42 % stake in joint venture with Indus Towers, which is the world’s biggest telecoms tower company, with about 110,000 towers.

Tower companies get their revenue from leasing infrastructure to network operators but they are going through a tough time in India as a Supreme Court order to revoke the regional licenses of eight mobile phone companies in the 15-player market has weighed on demand. Tower sharing in the wireless telecommunications sector and integrated telecommunications networks are relatively recent concepts in India. The success of the model depends on a number of factors including geography, population density in rural and urban areas, financial conditions affecting operators and customer behavioral patterns which are specific to telecommunications industries in different countries, including India. Bharti Infratel’s and Indus’ business model is based on increased sharing of towers by wireless service providers, as the addition of sharing operators at existing towers facilitates better capacity utilisation at relatively low incremental capital expense, enhancing Bharti Infratel’s and Indus’ cost and operational efficiencies. For the three month period ended June 30, 2012, Bharti Infratel had an average sharing factor of 1.82 co-locations per tower, while Indus had an average sharing factor of 1.96 co-locations per tower. Our financial prospects are directly dependent upon the sharing factor of Bharti Infratel’s and Indus’ towers and increasing their co-location rates is a key element of their growth strategy.

DETAILS	FY11	FY12	H1'FY13	FY13
Number of towers	78,442	79,064	80,656	81,088
Tenancy (x)	1.75	1.85	1.90	1.93
Net Sales (Rs. Cr)	8,508	9,452	4,972	9,777
EBITDA	3,128	3,539	1,844	3,677
EBITDA (%)	36.80	37.40	37.10	37.60
Net Profit (Rs. Cr)	551.48	751	460	852
Change Y-o-Y (%)	118.00	36.10	-----	13.40

Out of the Offer of a total of 18,89,00,000 Equity Shares -  3,00,46,400 Equity Shares are being offered by Compassvale; 60,09,280 Equity Shares are being offered by GS Strategic; 36,05,568 Equity Shares are being offered by Anadale; 30,04,640 Equity Shares are being offered by Nomura. The Equity Shares being offered by the Selling Shareholders under the Offer have been held by such Selling Shareholders for a period of more than one year prior to filing of the Draft Red Herring Prospectus with SEBI. Bharti has mandated eight banks for managing the IPO, with Standard Chartered as its lead banker, other banks managing the share sale are Barclays, JPMorgan, Bank of America Merrill Lynch, HSBC, UBS, and Kotak Mahindra and Enam Securities.  
According to me one should look for subscribing Bharti Infratel Ltd IPO as it will be the first listed Telecom Tower company on Indian bourses taking the country at par with world markets. Long term investors should look into subscribing the IPO for good opportunity. Short term investor can subscribe for listing gains.

THE BASICS OF CAPITAL BASE : EXPLAINED IN SHORT !!!

Many beginners ask me that what is share capital and how a company is formed, so here is a short explanation to that. Company can have Equity Shares, Preference Shares and or Differential Voting Rights Equity shares as its Share Capital. 

Share Capital denotes to the amount of capital raised by the issue of shares (viz Equity, Preference, DVR or all of them), by a company. It is collected through the issue of shares and remains with the company till its liquidation. Share Capital is owned capital of the company, since it is the money of the shareholders & so these share holders are the owners of the company. The total share capital is divided into small parts & each part is called a 'SHARE'. Share is the smallest part of the total capital of company. 

In India, Share holding of 51% in a company is considered as a controlled holding. Any company willing to go public or willing to have an IPO has to maintain at least 10% of its total issued shares with the general public. Recently SEBI have extended the deadline for all the companies in India to maintain at least 25% of their total issued shares with the general public. So, it means promoters cannot hold more than 75% of the total issued shares in a company. 25% public shareholding is must.

Types of SHARE CAPITAL : 
Authorized Capital - The maximum amount of capital which a company can collect or raise by selling its shares, it is also known as Nominal Capital or Registered Capital. Issued Capital -  Is the part of the Authorized capital which is actually issued to general public. Subscribed Capital - Is the part of the issued capital which is actually subscribed by the general public. Paid Up Capital - Is that part of the called up capital which is actually paid up by the shareholders. Now in general companies are not in practice to have partly paid up or call up money. The Company takes full face value money on the issue. So fully paid up Face value is the Paid Up Capital of the Company.

What is Share Capital Base :
When I form a company, I use my personal wealth as Capital i.e. I invest my own money into the company and into the business activities. In the process of forming & registering a new company under the Companies Act 1966 it needs to be Capitalized whereby I infuse money or assets into the company and get shares of that company in return. e.g. If I infuse Rs. 5000 or assets worth Rs. 5000 to form a company , I will be getting Shares worth Rs. 5000 of that newly formed company & so I become the promoter of the company. Capitalization is the process in which owners have to come with number of shares and its face value.

Here in India, per share value used is Rs. 10 , Rs. 5, Rs. 2, Re. 1 as its face value  which is then multiplied by number of shares issued or divided by total invested money. Let’s take some example – In my company I invest Rs. 5,000 - Thus the capitalization of my company is as follows –

1. Authorized capital is Rs. 5,000 i.e. 500 Shares x Rs. 10/share.
2. Paid up Equity Capital is Rs. 5,000, thus Rs. 5,000 becomes the total capital base of my company at the time of registration or inception.

There can also be second scenario where, I can have my capital base of Rs. 6,000…but I paid only Rs. 5,000. Therefore –

1. Authorized capital will be Rs. 6,000 i.e. 600 shares x Rs. 10 each.
2. Issued, Subscribed & Paid up Equity share capital is Rs. 5,000 i.e. issued capital is only of Rs. 5,000 & Issued equity shares is only 500 shares.

This is also the VALUE of business because it is still not generating any profits or it is still not established etc. I will use the second scenario for the further discussion which is in usual practice. To increase the value of my company, I work hard and increase the value of my company by branding, marketing, market positioning, revenue, profits, future potential, and market share. I keep all the profits as I am the only share holder having all the company's paid up equity capital and so my business has high net-worth. The total earnings of my company are divided by 500 shares. So the company’s Earnings Per Share (EPS) is based on 500 shares that are issued to me.

Remember, according to my authorized capital, I still have 100 shares of Rs. 10 face value more remaining to be issued. They are not yet issued or not been paid up & hence authorized capital is not considered while calculating EPS - its just taken as a note.

Going forward, at some point in the future, I feel that I am in need of more money or capital for the expansion or I want to grow my business – I have 2 ways – either I can go to banks or  go to other sources of finance or I forgo a little bit of my equity holdings.

If I go to banks which are loans/debts taken from banks – then I have to pay Interest which under all circumstances I have to pay. And, If I issue shares i.e. I forgo a little bit of my equity holding then in this case I don’t have to pay interest to them (my new shareholders) nor its compulsory to declare dividends, but I have to share my profits, losses and even bankruptcy with my new shareholders.

            So I decide to go for raising capital by diluting the equity i.e. I am taking additional partners by issuing them new shares. These partners can be Private Equity players, financial institutions or any public investor (if it is opened to common public which is called IPO) which will be my new shareholders. During this course of time, the value of my business has raised much more than Rs. 6,000 as it is now an established business making lots of good profit and with lots of potential & whoever wishes to become partner or stakeholder will be getting partial ownership of the well established profitable business with minimum risk and so I will be demanding Premium on the face value of Rs. 10 from my new shareholders, this premium will be as per the present value of the business.

How to determine Present Value – 

For example – Consider that the present value of the business comes to Rs. 1,20,000. With this increased value of the business, the market value per share will be Rs. 200/share. (Rs. 1,20,000/600 shares). I decide to issue 50 share from remaining 100 shares to go public. I use public offering (IPO) & price my share at Rs. 200/sh. I raise Rs. 10,000 (50 x Rs. 200). Now, the capital structure is as under –

1. Authorised capital is still Rs. 6,000 (600 sh of Rs.10 each).
2. Issued, Subscribed & Paid up Equity is Rs. 5500 (original 500 sh & additional 50 share).
3. Share premium Account will now come to existence with Rs. 9500 (Rs. 10,000 – 50 x 10)  

Share premium is considered as part of total shareholders’ equity. Additional money beyond face value is called Share Premium. Total Shareholder's Equity is also known as Net-worth or Stockholders Equity or Shareholders Fund or Share Capital.

            A company can also issue Preference shares or DVR share along with Equity shares. Many beginners presume that Equity base is the IPO price x IPO shares, but the fact is that in IPO the owner is only opening partial ownership to raise additional capital for growing business. At this point the total earnings of the company is divided by 550 shares. Because now a total of 550 shares have been issued & issued subscribe & paid up equity has increased to 550 shares. Even though the mass public has only 50 shares, it is not the only shares in company, IPO shares are add on to existing 500 shares. 

Company issues lavish Bonuses of Shares before IPO -
If one reads the Draft Red Herring Prospectus of any IPO one will notice that before the IPO the promoters or pre IPO shareholders are given lavish bonuses of shares reducing the net worth of company and increasing the issued, subscribed & paid up capital base of the company. I have seen some issues whereby the promoters are given bonus in the ratio of 100 shares for every 1 share held before the IPO this makes the promoter's acquisition price of equity share less than its Face value, in some cases it goes into paise. This is because before IPO, the value of shares are much higher due to the past profits are accumulated as "Reserves" in the balance sheet. And to draw back my capital I issue fresh new shares as bonus thus reducing my reserve to that extend and hence increasing the share base reducing its value. You can see many big investors exit wholly or partially in the IPO as they already have taken back their invested money in the form of Bonus shares, So one should also consider this while investing in the IPO's.    

FACEBOOK : THE MUCH AWAITED IPO !!!

Facebook has released a revised S-1 filing which list additional information on IPO.

The IPO would value Facebook at $74.8 billion(Rs.3,96,440 Cr), based on total of 2.138 billion Class A & B shares outstanding after the offering, assuming a $35 share price.

Total shares offered will be 33,74,15,352 at a proposed price range of $28-$35. It is expected that they could fix price at $31.50/sh. 

Facebook estimates that the net proceeds from sale of the Class A common stock that are offered will be approximately $5.6 billion (Rs.29,680 Cr), assuming an IPO price of $31.50/sh.

Primary shares (proceeds going to company) will be $180 million (Rs.954 Cr), Selling stockholders shares will be getting $157.4 million (Rs.834.22 Cr) these proceeds will not go to the company.

Mark Zuckerberg (28) the founder of Facebook will as Chairman & CEO, exercise as outstanding stock option with respect to 6,00,00,000 shares of Class B common stock and will then offer 3,02,00,000 of those shares as Class A common stock in Initial Public Offering. Facebook expects that the substantial majority of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur in connection with the option exercise.

Zuckerberg would control over 57.30% of the capital stock voting power following the IPO. In February Facebook reported Earnings of $1 billion (Rs.5,300 Cr) on the Sales of $3.71 billion (Rs. 19663 Cr), Facebook reported Earnings per share of $0.43 (Rs.22.79) Dec 2011. Facebook reported $381 million in Income from Operations; Net income of $137 million (Rs.726 Cr), Facebook reported Earnings per share of $0.09 (Rs.4.77) 31st March 2012.

Facebook says it has $3.91 billion (Rs.20,723 Cr) in cash as of March 31, 2012. It estimates it will have $9.511 billion (Rs.50,408.30 Cr) in cash assuming a $31.50 IPO prices.

Facebook debts are $1,587 million (Rs.8,411.1 Cr) which will remain same after IPO, Total Stockholder’s Equity is at $5,597 million (Rs.29,664.10 Cr) which will be $11,198 million (Rs.59,349.40 Cr) after IPO.

The main purpose of IPO is to create a public market for the Class A common stock and thereby enable future access to the public equity markets by the company and its employees, and obtain additional capital, and facilitate an orderly distribution of shares for the selling stockholders. Facebook intends to use the net proceeds from IPO for working capital and other general corporate purposes, they may use some of the net proceeds to satisfy a portion of the anticipated tax withholding and remittance obligation related to the initial settlement of company’s outstanding RSU’s, they may also use a portion of the proceeds for acquisitions of complementary business, technologies or other assets. 

The shares are expected to be priced on May 17 evening, with trading beginning on May 18, 2012. Facebook to list its stock on Nasdaq under the ticker "FB", Facebook will be compared with GOOGLE, GROUPON, ZYNGA. At the assumed market capitalization of close to $100 billion (Rs.5,30,000 Cr) FB will be competing AMAZON.COM, CISCO SYSTEMS in terms of market capitalization.
Facebook would have Price to Earnings of about 80 times its 2011 earnings. Its valuation is 19 times its revenue, which is close to 21 times revenue valuation of its faster- growing competitor LinkedIn. Experts believe that these are nosebleed multiples and Facebook needs to good growth to support such absurd multiples.

MCX (Multi Commodity Exchange) : IPO SUBSCRIBE !!!

Price Band: Rs. 860 - Rs. 1032, Face Value: Rs.10.

Minimum Lot Size: 6 Shares.

Issue opens on: 22nd February 2012, Wednesday.

Issue closes on: 24th February 2012, Friday.

Listing on: 9th March 2012.

Total No. of Shares offered: 64,27,378 shares or 12.60 %

Employee Reservation: 2,50,000 shares.

Net Public Offer: 61,77,378 shares.

QIB Book: 3,088,689 shares.

Non – Institutional Bidders: 9,26,607 shares.

Retail Book: 21,62,082 shares.

Equity Shares outstanding prior Issue: 5,09,98,369 shares.

Equity Shares outstanding post Issue: 5,09,98,369 shares.

Total Size of the Issue: Rs. 552.75 Crs - Rs. 663.30 Crs.

IPO GRADING: 5/5 - CRISIL – Strong Fundamentals.
FAIR VALUE RANGE - Rs. 1200 - Rs. 1400.

KEY FINANCIALS (Consolidated)	31 Mar 2010	31 Mar 2011	31 Dec 2011
Total Income (Rs. in Cr)	493.70	447.56	474.50
Net Profit (Rs. in Cr)	220.80	176.27	217.95
Net Profit margin (%)	35.70	39.40	47.00
EPS (Rs.)	43.29	34.56	42.74
Net Asset Value (Rs.)	136.63	166.45	210.58
Return on Equity (%)	21.40	22.80	32.20
Return on Capital Employed (%)	31.30	31.80	45.10

MULTI COMMODITY EXCHANGE OF INDIA LIMITED : MCX Stock Exchange Limited was originally incorporated as a private limited company on April 19, 2002 as Multi Commodity Exchange of India Private Limited and subsequently converted into public limited company on May 16, 2002 in 2008 and is based in Mumbai, India. MCX Stock Exchange Limited provides a trading platform in currency derivatives in India. The company offers trading in currency futures contracts in four currencies consisting of the U.S. Dollar-Indian Rupee (USDINR), Euro-Indian Rupee (EURINR), Pound Sterling-Indian Rupee (GBPINR), and Japanese Yen-Indian Rupee (JPYINR). The company, through its subsidiary, MCX-SX Clearing Corporation Limited, offers clearing and settlement services in multi asset classes.  MCX enjoys the leadership position in the commodity futures industry, the market shares in terms of total value of commodities futures contracts traded on MCX in Fiscal 2011 was 82.4 % of the Indian commodity futures industry. There are over 30 commodity futures and options exchanges worldwide that trade commodities ranging from energy, metals, agriculture to livestock in many countries including the United States, China, Japan, Malaysia and the United Kingdom. In 2011, MCX stood at 5^th place among the global commodity bourses in terms of futures contracts traded, during the period between January and June 2011 about 127.8 million futures contract were traded on MCX. MCX ranks no.1 in silver, no.2 in natural gas, no.3 in crude oil and gold futures trading. The company reaches out to about 800 cities and towns in India with the help of about 1,26,000 trading terminals. MCX COMDEX was the first and only composite commodity futures price index. MCX has main competitor is National Commodity & Derivative Exchange Ltd (NCDEX) – Mumbai; National Multi Commodity Exchange Ltd  (NMCEX)- Ahmedabad; Indian Commodity Exchange Ltd (ICEX) – Gurgaon; Ace Derivates and Commodity Exchange (ACE) – Ahmedabad.

MCX holds 5 % in Dubai Gold and Commodity Exchange and the book value of this investment was Rs. 2.185 Cr as of December 31, 2011; 100 % in MCX Clearing Corporation Ltd; 5 % in MCX SX; 26 % in MCX-SX Clearing Corporation Ltd; 51 % in SME Exchange of India Ltd with initial investment of Rs. 5,10,000

MCX derives its income primarily from transaction fees with respect to the trades executed on MCX Exchange, annual subscription fees, member admission fees, terminal charges, proceeds of sale and dividends from investments and interest from bank deposits. Commodities play an important role in India‘s economy. India has over 7,000 regulated agricultural markets, or mandis, and the majority of the nation‘s agricultural production is consumed domestically, according to the Agricultural Marketing Information Network. India is the world‘s leading producer of several agricultural commodities. The agriculture sector accounted for approximately 14.2 % of India‘s gross domestic product (GDP) at a constant price (2004-05) for the fiscal 2011. India‘s GDP at current market prices for the fiscal 2011 was estimated to be Rs. 78,779.47 billion (Source: Economic Survey 2010-11). There are currently 21 commodity exchanges recognised by FMC in India offering trading in over 60 commodity futures with the approval of FMC. In the fiscals 2009, 2010 and 2011, the total value of commodities traded on commodity futures exchanges in India was Rs. 52,489.57 billion, Rs. 77,647.54 billion and Rs. 119,489.42 billion, respectively. The total value of commodities traded on commodity futures exchanges in India for the first nine months ended December 31, 2011 was Rs. 137,228.55 billion.  

Out of the Offer of a total of 64,27,378 Equity Shares, 26,43,916 Equity Shares are being offered by FTIL, 21,12,025 Equity Shares are being offered by SBI (Equity), 7,81,508 Equity Shares are being offered by GLG, 3,90,754 Equity Shares are being offered by Alexandra, 2,46,175 Equity Shares are being offered by Corporation Bank, 1,48,000 Equity Shares are being offered by ICICI Lombard and 1,05,000 Equity Shares are being offered by Bank of Baroda. The Equity Shares being offered by the Selling Shareholders under the Offer have been held by such Selling Shareholders for a period of more than one year prior to filing of the Draft Red Herring Prospectus with SEBI.

Comparisons with Industry as on 31st March 2011

Exchange	Currency	Share Price	Shares O/S (mn)	Market Cap (mnUS$)	EPS Estimate FY13	P/E FY13e	EV/Sales FY13e	EV/EBITDA FY13e
CME	US$	291	67	19295	17.90	16.20	0.90	8.50
ICE	US$	133	73	9644	8.00	16.50	2.30	8.80
MCX	INR	1032	51	1053*	NA	NA	NA	NA

*1US$=Rs.50

According to me one should definitely look for subscribing Multi Commodity Exchange India Ltd IPO as it will be the first listed exchange on Indian bourses taking the country at par with other markets like US, UK, Japan, Australia, Singapore & Hong Kong. Globally , Exchanges trends to trade at average of 5 times their book value and 18 - 20 times their earnings. Long term investors should look into subscribing the IPO for good opportunity. Short term investor can subscribe for listing gains.