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Our Bureau

Bangalore , Sept. 13

Multi Commodity Exchange of India Ltd (MCX) said on Wednesday that it would go ahead with its initial public offer (IPO) after the Government allows foreign institutional investors to trade in commodity futures. MCX proposes to raise between Rs 300 and Rs 500 crore from the IPO and plans to utilise the proceeds to expand its operations and set up rural infrastructure.

Awaiting Govt. policy

Mr Jignesh Shah, Managing Director and CEO, MCX said the exchange was waiting for the Government to come up with a policy on allowing FIIs to trade in commodities and invest in exchanges by amending the Forward Contract (Regulation) Act (FCRA). At present, the FCRA does not allow mutual funds, foreign institutional investors and banks to trade in commodities.

"Once the amendment to FCRA is carried out, we will immediately re-file the papers," Mr Shah said. MCX had earlier filed its draft red herring prospectus for IPO with SEBI on March 16 for issue of 50 lakh shares of face value Rs 10 each. The IPO comprises a fresh float of 14 lakh shares by MCX and an offer for sale of 36 lakh share by promoters Financial Technologies and Corporation Bank.

Further, Mr Shah said the exchange plans to add about 20 new commodities including plantation crops such as coffee and spices among others to its existing list of 80 commodities by the year-end.

MCX also plans to re-launch futures trading in steel soon, Mr Shah said. For the current fiscal, MCX expects to double its trading volume to Rs 20,000 crore.

Mr Shah was in Bangalore to launch "Vista Online Wars 2006," the annual business festival of the Indian Institute of Management, Bangalore. Financial Technologies (India) Ltd in tie-up with IIMB is conducting the Vista Online Wars, which consist of a series of real-time online games in commodities and forex trading for management students.

More Stories on : Commodity Exchanges | IPOs | Foreign Institutional Investors

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MCX IPO after Govt nod for FII trade in commodity futures

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