Financial Technologies (FTIL), which has floated a new stock exchange MCX-SX, today said it has sold 4.4 lakh shares held in rival bourse National Stock Exchange for Rs 167.2 crore.
FTIL, which together with its group firm and the country's top commodity bourse MCX runs the new stock exchange MCX-SX, sold 4.4 lakh shares of NSE at a price of Rs 3,800 per share.
The transaction was disclosed by FTIL in a regulatory filing, but it did not mention how much stake in NSE these shares account for.
Both NSE and MCX group used to have 1 per cent stake in each other, but NSE later sold the shares held by it. The deal is estimated to have valued NSE at over $4 billion dollars.
Last year, NSE had said it was selling its 1 per cent stake in MCX as the stake was no longer of strategic importance to it. However, at that time, MCX group had decided to continue to hold the NSE stake.
Sources said Financial Technologies has majority of its 1 per cent stake and held back some.
While the stakes were given to each other by NSE and MCX group as a kind of token investment, a bitter rivalry has emerged between the two entities over the past couple of years. Starting with the differences over the exchange software solutions previously supplied by FTIL to NSE, the rivalry went on to another level when MCX group came into direct competition with NSE with the launch of exchange business for trading in non-commodity securities.
MCX-SX currently provides currency futures trading, while it also sought permission for stock trading, but its application was rejected by Sebi in September. The Sebi order late last month was challenged in the Bombay High Court.
Earlier, MCX-SX has accused Sebi of a biased approach towards the existing players and promoting monopoly in the market. While NSE is the largest player in stock exchange arena, its older rival BSE holds a comparatively small market share.
In early 2009, when the rivalry had already become clear between FTIL and NSE in the exchange space, Financial Technologies agreed to NSE's offer and said that it would facilitate the transaction at a right time.
Earlier, in 2008, a clutch of investors including SHCIL and IFCI had sold part of their stakes in NSE at a price of Rs 3,500 per share, in a deal also valuing the exchange at over $4 billion. Given the difference between the per share prices of two deals, the current deal gives the exchange a valuation of close to $4.5 billion.
