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FMC clears Kotak’s 15% stake buy in MCX, FTIL sells remaining 5% too for $35M

27 August, 2014

Commodity market regulator Forward Markets Commission has cleared Kotak Mahindra Bank’s proposal to acquire up to 15 per cent equity stake in Multi Commodity Exchange of India Ltd (MCX), from Financial Technologies (India) Ltd, as per a stock market disclosure.

The private sector lender had entered into share purchase agreement last month to buy 15 per cent stake for Rs 459 crore ($76.2 million).

In a separate disclosure, FTIL said it has sold its remaining 5 per cent holding in MCX on Wednesday, thereby exiting the commodity bourse completely. It did not give more details but stock market data shows it sold the remaining 5 per cent for Rs 212 crore ($35 million).

Earlier in July, FTIL had sold 6 per cent of MCX in two tranches which reduced its holding in the commodity bourse to around 20 per cent.

MCX went public in 2012 and as per SEBI norms promoters need to maintain a minimum ownership for a period of three years after the public float.

The firm had started the process to reduce holding in March 2014 for divesting its 24 per cent stake in MCX and had appointed JM Financial as an investment banker for the same.

The development follows an order by FMC in December that declared FTIL and its promoter Jignesh Shah unfit to operate any exchange in the country, in light of the National Spot Exchange Ltd (NSEL) scam. FMC also directed FTIL—which owned 26 per cent stake in MCX—and Shah to bring down their stake in the exchange to 2 per cent.

Following this, MCX board had also asked its promoter FTIL, which in turn is backed by private equity firm Blackstone, to cut its stake in line with the FMC order.

Early this year, MCX had scrapped a proposed preferential allotment which would have diluted the stake of FTIL by default.

Last month MCX shareholders had approved changes in the bylaws by empowering the bourse to take necessary steps to ensure FTIL reduces its stake including scrapping its voting rights.

MCX scrip closed at Rs 856.85 a share, up 5 per cent on the BSE.


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FMC clears Kotak’s 15% stake buy in MCX, FTIL sells remaining 5% too for $35M

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