MCX's investment worth about Rs 100 crore in Metropolitan Stock Exchange is likely to be wiped off with Sebi rejecting the commodity bourse's proposal to hike stake by conversion of existing warrants.
The country's largest commodity exchange MCX is facing difficulty in selling convertible warrants held by it in Metropolitan Stock Exchange (earlier known as MCX-SX) that are to lapse on June 19.
At the end of March this year, MCX held nearly five per cent equity stake as well as 58.26 crore warrants valued at around Rs 117 crore in the stock exchange. Sources said the present value of warrants is about Rs 100 crore.
MCX today said validity of the warrants would be expiring on June 19.
"The company's request for extension of time as well as to retain 15 per cent shareholding as applicable in case of a stock exchange has not been acceded to by Sebi," it said in a filing to the BSE.
Under the Securities Contracts (Regulation) (Stock Exchanges And Clearing Corporations) Regulations, 2012, rights over equity held beyond a given threshold would be applicable only for a certain period of time.
In the present case, the period of three years provided to MCX for reducing the stake ends on June 19.
With Sebi declining to hike the stake or extend the validity of warrants, sources said that MCX's investment worth about Rs 100 crore may get wiped off as it could be difficult to find a buyer before the deadline ends.
Shares of MCX rose marginally to close at Rs 986.70 on the BSE.
