Blackstone to increase stake in MCX to 4.99%, may become top institutional shareholder

Private equity giant Blackstone will pick up 3 more per cent stake in Multi-Commodity Exchange of India (MCX) through market deals to increase its stake to 4.99 per cent. The proposed stake purchase comes after Blackstone picked up 2 per cent stake in India's largest commodity bourse MCX for Rs 104 crore in March this year.

"Forward Markets Commission (FMC) has accorded its approval to Blackstone GPV Capital partners (Mauritius) VI FII Ltd. to increase its stake in the company up to 4.99 per cent through secondary market transaction," said MCX in a stock market disclosure on Wednesday.

MCX scrip shot up nearly 9 per cent in the morning and was trading at Rs 409.5, up 5.24 per cent at 10:47 am.

The additional stake purchase would bring down Blackstone's average acquisition price. Blackstone GPV Capital Partners Mauritius VI FII had picked up the shares from Merrill Lynch (Mauritius), one of the pre-IPO investors in MCX, in March at Rs 1,020 per unit.

At the current market price, Blackstone would need to shell out a little over Rs 60 crore more to raise its stake to 4.99 per cent.

If successful, the move would make Blackstone the largest non-promoter shareholder in MCX ahead of IFCI and Aginyx Enterprises Ltd, which hold 4.79 per cent each. Other shareholders in MCX include Valiant Capital, Intel Capital, NYSE Euronext, Fidelity and GIC Singapore.

The move comes as the commodity markets regulator FMC said on Tuesday that Financial Technologies was unfit for holding more than 2 per cent stake in MCX. FMC has also held Financial Technologies and its directors responsible for the Rs 5,500 crore fraud involving its unit National Spot Exchange (NSEL).

"In the public interest and in the interest of the commodities derivatives market which is regulated under FCRA, 1952, the commission holds that Financial Technologies (FTIL) is not

a ‘fit and proper person’ to continue to be a shareholder of 2% or more of the paid-up equity capital of MCX as prescribed under the guidelines issued by the government for capital structure of commodity exchanges post five years of operation," said the FMC order.

Blackstone also happens to be a shareholder of FTIL and as of September 30, 2013 held 7 per cent stake. CVCI is another shareholder of FTIL, holding around 4.3 per cent stake.

(Edited by Joby Puthuparampil Johnson)

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