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FTIL sells 2% stake in MCX to Rakesh Jhunjhunwala for over $11M

08 July, 2014

Financial Technologies (India) Ltd sold 2 per cent stake in Multi Commodity Exchange of India Ltd (MCX) through a market transaction to ace investor Rakesh Jhunjhunwala. The firm sold 1 million shares at Rs 664 each on Tuesday, thereby reducing its holding from 26 per cent to 24.02 per cent.

MCX scrip rose over 4 per cent to close at Rs 679.7 a share on the BSE in a weak Mumbai market on Tuesday.

“The company continues the discussions on disinvestment with the prospective buyers and on reaching a definitive offer, the company may consider the disinvestment to such bidders,” FTIL said.

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

Due to the process of divestment getting delayed as a result of the publishing of revised norms by FMC and publishing of PwC special audit report, it has opted to part sell its stake to reduce holding through a market transaction.

It said equity shares representing 20 per cent of the post-offer equity share capital of MCX held by FTIL are locked in as promoters’ contribution till March 2015. Any disinvestment of this 20 per cent will need to comply with the regulations.

As many as nine bidders had evinced interest in buying 24 per cent stake in the country’s largest commodity bourse MCX. The deal worth over $110 million had missed its deadline of April 25.

Thereafter the sale process also faced roadblock as FTIL promoter Jignesh Shah was arrested and continues to remain in custody as the court has refused to grant him bail.

The development follows an order by FMC in December that declared FTIL and its promoter Shah unfit to operate an exchange in the country, in light of the National Spot Exchange Ltd (NSEL) scam. FMC also directed FTIL—which owns 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 empowering the bourse to take necessary steps to ensure FTIL reduces its stake including scrapping its voting rights.

(Edited by Joby Puthuparampil Johnson)


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FTIL sells 2% stake in MCX to Rakesh Jhunjhunwala for over $11M

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