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FTIL sells 4% more in MCX for around $26M

16 July, 2014

Financial Technologies (India) Ltd sold 4 per cent additional stake in Multi Commodity Exchange of India Ltd (MCX) through a market transaction after divesting 2 per cent stake to ace investor Rakesh Jhunjhunwala early this month.

The firm sold 2 million shares at Rs 753 a unit on Wednesday for around Rs 155 crore ($26 million). The stock price of MCX had spurted over the last one week when Jhunjhunwala picked stake at Rs 664 a share.

MCX scrip declined 2.5 per cent to close at Rs 749.75 a share on the BSE in a strong Mumbai market on Wednesday.

FTIL’s holding has now shrunk to around 20 per cent and it said that this remaining holding is under lock-in till March 7, 2015. Any disinvestment of this 20 per cent will need to comply with the regulations.

The firm had started the 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 delay in the divestment as a result of the publishing of revised norms by FMC and PwC’s special audit report, it has opted to part sell its stake to reduce holding through market transactions.

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 by 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 4% more in MCX for around $26M

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