 "FTIL sells 5% stake in MCX, completes exit")
The Jignesh Shah-promoted Financial Technologies India Ltd (FTIL) on Wednesday fully exited Multi Commodity Exchange (MCX) by selling five per cent stake on the stock exchanges. The stake was bought by SBI life, IDFC and Reliance MF, among others.
With this sale, FTIL has sold 26 per cent stake in MCX, raising Rs 892 crore. The sale follows a Forward Markets Commission order declaring FTIL unfit to run an exchange, after a payment crisis at FTIL-promoted National Spot Exchange Ltd.
FTIL’s exit is expected to provide respite to MCX, which has been struggling to secure approvals for its contracts. In the past few days, the exchange’s volumes have fallen sharply, as the number of contracts is very low, limiting its hedging options. Also, positions couldn’t be carried forward (as of now, there is no contract beyond December).
Of the five per cent stake sold by FTIL on Wednesday, 2.69 per cent was sold on BSE and the rest on the National Stock Exchange. Earlier, it had sold six per cent in the open market and entered into a share purchase agreement with Kotak Mahindra Bank to sell 15 per cent.
In a statement, it said, “Post the sale and subject to unblocking of balance shares by MCX to complete the condition precedent of the share purchase agreement, the company holds nil shares in MCX.
“The stake sale is without prejudice to legal rights and remedies.”
On Wednesday, the MCX stock closed at Rs 856.85 on
BSE, up five per cent. At this closing price, MCX’s market capitalisation stands at Rs 4,370 crore.
Meanwhile, the FMC on Wednesday approved the purchase of 15 per cent stake in MCX by Kotak Mahindra Bank. On July 20, the bank had agreed to acquire this stake at Rs 600 a share, a total consideration of Rs 459 crore.
With this sale, FTIL has sold 26 per cent stake in MCX, raising Rs 892 crore. The sale follows a Forward Markets Commission order declaring FTIL unfit to run an exchange, after a payment crisis at FTIL-promoted National Spot Exchange Ltd.
FTIL’s exit is expected to provide respite to MCX, which has been struggling to secure approvals for its contracts. In the past few days, the exchange’s volumes have fallen sharply, as the number of contracts is very low, limiting its hedging options. Also, positions couldn’t be carried forward (as of now, there is no contract beyond December).
Of the five per cent stake sold by FTIL on Wednesday, 2.69 per cent was sold on BSE and the rest on the National Stock Exchange. Earlier, it had sold six per cent in the open market and entered into a share purchase agreement with Kotak Mahindra Bank to sell 15 per cent.
In a statement, it said, “Post the sale and subject to unblocking of balance shares by MCX to complete the condition precedent of the share purchase agreement, the company holds nil shares in MCX.
“The stake sale is without prejudice to legal rights and remedies.”
On Wednesday, the MCX stock closed at Rs 856.85 on
BSE, up five per cent. At this closing price, MCX’s market capitalisation stands at Rs 4,370 crore.
Meanwhile, the FMC on Wednesday approved the purchase of 15 per cent stake in MCX by Kotak Mahindra Bank. On July 20, the bank had agreed to acquire this stake at Rs 600 a share, a total consideration of Rs 459 crore.
FTIL in a press release has also said that, "Post the selling and subject to unblocking of balance shares by MCX to complete the condition precedent of share purchase agreement, the company holds nil shares in MCX. The stake sale is without prejudice to the legal rights and remedies"
MCX will have to write to depository NSDL to unlock 15 remaining shares which can be sold to Kotak bank.
Last month, investor Rakesh Jhunjhunwala had acquired five per cent stake in MCX from FTIL.
After the break out of the NSEL scam, FMC had declared FTIL not fit and proper to hold a stake in MCX due to which FTIL was forced to exit the commodity exchange. FTIL earlier owned 26% stake in MCX.