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Financial Technologies India Ltd (FTIL) on Saturday said it planned to finalise the bidder for its stake sale in Multi-Commodity Exchange (MCX) on April 25. The company has received 10 applications for the expression of interest invited a fortnight ago.
An FTIL restructuring committee has shortlisted various candidates, of whom nine have submitted non-binding offers.
“Investors, including Indian and global conglomerates, have shown interest in buying stake,” said FTIL. A source said Chicago Mercantile Exchange, Warburg Pincus, Kotak Group (which anchors ACE commodity exchange), Tata Capital and BSE were among the investors.
A decision on the matter will be taken by JM Financial, the banker for the stake sale. FTIL will now seek MCX’s cooperation to facilitate meetings and due diligence by the prospective bidders to complete the process in a time-bound manner.
The Forward Markets Commission has put the onus of implementing its order on carrying out the stake-sale by April 30 on MCX. The FMC had issued the order in December, saying FTIL and three other entities were unfit to run the commodity exchange. FTIL holds 26 per cent in MCX; it has to reduce this to two per cent.
In MCX, foreign institutional investors (FIIs) hold 19.86 per cent, within the cap of 23 per cent; as of March-end, foreign direct investment (FDI) holding was 7.54 per cent, against the cap of 26 per cent, according to MCX. Last year, the Union Cabinet had decided to merge the FDI and FII limits, but this hasn’t been notified yet. According to norms, a secondary sale can be made to FIIs; therefore, FTIL can sell 3.14 per cent stake to foreign investors.
An FTIL restructuring committee has shortlisted various candidates, of whom nine have submitted non-binding offers.
“Investors, including Indian and global conglomerates, have shown interest in buying stake,” said FTIL. A source said Chicago Mercantile Exchange, Warburg Pincus, Kotak Group (which anchors ACE commodity exchange), Tata Capital and BSE were among the investors.
A decision on the matter will be taken by JM Financial, the banker for the stake sale. FTIL will now seek MCX’s cooperation to facilitate meetings and due diligence by the prospective bidders to complete the process in a time-bound manner.
The Forward Markets Commission has put the onus of implementing its order on carrying out the stake-sale by April 30 on MCX. The FMC had issued the order in December, saying FTIL and three other entities were unfit to run the commodity exchange. FTIL holds 26 per cent in MCX; it has to reduce this to two per cent.
In MCX, foreign institutional investors (FIIs) hold 19.86 per cent, within the cap of 23 per cent; as of March-end, foreign direct investment (FDI) holding was 7.54 per cent, against the cap of 26 per cent, according to MCX. Last year, the Union Cabinet had decided to merge the FDI and FII limits, but this hasn’t been notified yet. According to norms, a secondary sale can be made to FIIs; therefore, FTIL can sell 3.14 per cent stake to foreign investors.
However, following FTIL’s efforts to complete the process on time, MCX is understood to have agreed to take up the case of allowing fungibility in FDI and FII limits.
With regard to the stake sale, FTIL has said it will keep the FMC in the loop.
