Jhunjhunwala, others convert MCX-SX warrants

Equity shares issued to 12 investors

At a board meeting held on Tuesday, the MCX-SX board has approved the issuance of equity shares, earlier held by Financial Technologies (FTIL) as warrants, to 12 investors, including to investor Rakesh Jhunjhunwala. Trust Investment Advisors, Edelweiss Commodities Services, Derive Investments and Madhu Vadera Jayakumar were among the others in the stake-sale.

“After transfer of substantial chunk of warrants holding by FTIL to investors as mentioned above, and the impending transfer of additional warrants and equity, FTIL will have completely exited MCX-SX,” said a statement issued by the stock exchange.

Besides, Jhunjhunwala will also be issued equity shares earlier held by FTIL.

Last week, BSE had sought clarifications from FTIL after the company sold its entire stake in MCX-SX in November to Jhunjhunwala and the other entities in a deal worth Rs 88 crore in a share and warrant purchase agreement. BSE had questioned the viability of the sale of warrants, which had earlier been declared as being extinguished by FTIL in a notice issued by the company in August this year.

An exchange official on condition of anonymity said that legal advice had been received which said that extinguished securities could be revived under certain conditions. The exchange believes that these conditions have been met, according to this person.

“With the current set of transfer of warrants and their exercise by third parties, the exchange has complied with the requirement of raising its undisputed net-worth, which now stands comfortably above the regulatory minimum,” said the exchange statement.

As per regulation, stock exchanges are required to have a minimum networth of Rs 100 crore and a minimum daily turnover of Rs 1000 crore.