Some state-run banks made 10,000-13,000 per cent gains on their holdings in the Multi Commodity Exchange (MCX) after the latter commodity bourse made an impressive listing on Friday.MCX shares made their debut on the Bombay Stock Exchange at a discovered price of Rs 1,387 after 45 minutes of order matching, to test the new norms introduced by the Securities and Exchange Board of India in February to curb listing-day volatility.
The stock touched a high of Rs 1,416 in the morning trade, but gave up some gains to finally close 25.7 per cent higher than the issue price, at Rs 1,297.05.
The MCX issue, the first major Initial Public Offer (IPO) in the Indian market in seven months, raised Rs 660 crore (Rs 6.6 billion). The issue was subscribed 54 times.
Many banks and financial investors, which had taken an early stake in MCX, had bought shares at Rs 10 apiece and then received bonus shares in 2011 at a ratio of one for every four shares held in the company. The exchange was set up in 2002.
For example, the country's largest bank, State Bank of India (SBI), bought MCX shares in 2004 at Rs 10 per share. Among the banks, it had the largest holding in the commodity bourse before the IPO.
However, the bank sold almost 80 per cent of its shares in the offer for sale at Rs 1,032, the issue price.
Despite selling its stake, the bank made a total gain of about Rs 284 crore (Rs 2.84 billion), compared to its cost of Rs 2.64 crore (Rs 26.4 million). This is an almost 11,000 per cent gain in eight years. Including the dividend, the gains would