Fin Tech eyes stake in OTCEI

Financial Technologies, the promoter of the Multi Commodity Exchange of India (MCX), has evinced interest in acquiring stakes in the Over the Counter Exchange of India (OTCEI) and the Interconnected Stock Exchange (ISE), according to sources.

Financial Technologies had recently applied to the Securities and Exchange Board of India (Sebi) expressing interest in floating a separate stock exchange for small and medium enterprises (SMEs). The company's move to acquire a stake is seen as a step towards setting up an SME bourse.

"In the next one or two years, we will see something like the London's Alternative Investment Market (AIM) in India, as the regulatory environment in the country is in favour of setting up a separate SME exchange," said a senior official of the ISE.

The OTCEI had placed Financial Technologies' proposal to buy stake before its promoters and was awaiting their response, said sources.

"We expect something to happen in favour of an SME stock exchange in the Budget before we can take any step further," said a senior official of the OTCEI.Officials of Financial Technologies were not available for comment.

The ISE is expected to complete its valuation shortly, with the September 14 deadline for the completion of demutualisation process approaching. Apart from Financial Technologies, a few other IT companies and private equity firms are learnt to have approached the exchange to acquire stake.

Most of the domestic SMEs have been accessing the London's AIM for overseas capital, as the listing norms are less stringent there.

The OTCEI is promoted by financial institutions such as UTI, ICICI, IDBI and LIC, while the ISE is promoted by 13 regional stock exchanges of Bangalore, Kochi, Jaipur, Bhubaneshwar and Mangalore, among others.