MCX IPO fully covered on 2nd day

MUMBAI (Reuters) - An initial public offering by the Multi Commodity Exchange (MCX) to raise up to $134 million was fully covered on the second day of its launch, and analysts said strong response to the issue is expected to revive the dormant primary market.

India's first IPO this year is seen as a test of investor appetite for share sales after weak local markets forced many companies to shelve stock offerings last year.

Share offerings in the pipeline include a follow-on share sale by state-run companies ONGC, SAIL and BHEL.

"We believe this issue, being the first quality issue post major IPO flops, is likely to receive overwhelming response," said an analyst with Aditya Birla Money Research, which has recommended that investors subscribe to the issue.

The IPO will be subscribed over 20 times in the retail segment, said the Aditya Birla Money analyst, who declined to be named.

Analysts said MCX's more-than-85-percent market share will help draw equity investors seeking exposure to commodity markets.

"We believe MCX can witness strong growth in revenue and profitability going ahead, which makes its valuation much more attractive than global peers," said Sharan Lillaney, an analyst with Angel Broking.

MCX, which will become the first Indian bourse to list its shares on an exchange, is offering about 6.4 million shares in the IPO in the price range of 860 rupees to 1,032 rupees each. The public sale opened on Wednesday and will close on Friday.

The Sensex has risen nearly 17 percent this year after dropping 25 percent in 2011, hit by the euro zone debt crisis, rising interest rates and concerns about slowing domestic economic growth.

Majority shareholder Financial Technologies (India) Ltd and investors including state-controlled SBI and Bank of Baroda (BOB.NS) are selling part of their holdings in the MCX IPO, the company has said.

Morgan Stanley (MS.N), Citigroup and Edelweiss Capital (EDEL.NS) are the bookrunners for the share sale.

(Reporting by Sumeet Chatterjee & Siddesh Mayenkar; Editing by Aradhana Aravindan)