Blackstone-backed Financial Technologies (India) Ltd (FTIL) has entered into a share purchase agreement to reduce its stake in Indian Energy Exchange (IEX) for Rs 72.89 crore ($12 million), as per a stock market disclosure.
FTIL said it is selling 1.36 million shares of lEX to Golden Oak (Mauritius) Limited. Although this couldn’t be verified independently, Golden Oak is believed to be part of Ambit Mauritius Investment Managers.
The transaction is to comply with Central Electricity Regulatory Commission (CERC) regulations to bring down the company’s stake in lEX to 25 per cent as previously announced. As per FTIL annual report, this was to be met by January 20, 2014.
As of March 31, 2013, FTIL held 33.5 per cent stake in IEX.
The company said, subsequent to the above mentioned transaction, its shareholding in power exchange lEX will come down to 28.49 per cent and on a fully diluted basis stand at 25.64 per cent.
This is the second such divestment decision by FTIL this month. Earlier, India Value Fund Advisors (IVFA) struck a deal to buy National Bulk Handling Corporation Limited (NBHC), a subsidiary of FTIL, for Rs 241.74 crore ($39.4 million).
NBHC offers commodity management solutions, including storage and bulk handling services, pest management, testing and certification, market intelligence, trade consultancy & support, warehouse audit & accreditation & commodity valuation and collateral management services. It has a pan-India presence managing 569 storage facilities (warehouses and cold storages) under the lease and franchisee basis, covering an expanse of over 1.47 million MT capacity and admeasuring 8.8 million sq. ft.
Early this week, India’s capital markets regulator Securities and Exchange Board of India (SEBI) directed FTIL and its related entities to offload their stake in MCX Stock Exchange Ltd (MCX-SX) and other exchanges within three months, as the Jignesh Shah-controlled company failed to meet the 'fit and proper' criteria required for a shareholder of an exchange.
SEBI has also cancelled the voting rights of FTIL and its related entities in all exchanges and clearing corporations.
FTIL holds stake in MCX-SX; MCX-SX Clearing Corporation; Delhi Stock Exchange; Vadodara Stock Exchange and National Stock Exchange.
The capital market regulator’s order follows an earlier ruling by the commodity market regulator Forward Markets Commission (FMC) on December 17 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.
This is under litigation in the Bombay High Court.
(Edited by Joby Puthuparampil Johnson)