MCX sells part of equity convertible warrants in Metropolitan Stock Exchange

Commodity bourse operator Multi Commodity Exchange of India Ltd (MCX) has sold part of equity convertible warrants it held in Metropolitan Stock Exchange of India Ltd (MSEI), formerly known as MCX Stock Exchange Ltd.

MCX has sold 14.82 crore warrants of MSEI convertible into equal number of equity shares of MSEI, it said on Thursday. It did not disclose the deal value nor the name of the buyers.

As on December 31, 2014, the commodity exchange held 27.1 million equity shares of MSXI besides 634 million equity warrants, representing 37.68 per cent of diluted equity base.

In March, it sold a chunk of the convertible warrants to IL&FS in separate tranches and also converted some into equity. Post these transactions, its direct equity stake rose from 2.88 per cent to 4.14 per cent while its warrants holding shrunk from 63.41 crore to 59.16 crore.

The latest warrant sale puts a question mark over the fate of the remaining warrants.

Early this month, MCX had said under the Securities Contracts (Regulation) (Stock Exchanges And Clearing Corporations) Regulations, 2012, any holding of equity or equity convertible instruments in excess of the limit of shareholding specified in the regulations needs to be reduced within a period as may be decided by SEBI. This period could initially run for up to three years.

In the case of MCX, this was expiring on June 19, 2015. MCX had requested for extension of time as well as to retain 15 per cent shareholding, as applicable in case of a stock exchange, but this was rejected by SEBI.

MSCI started operations in the currency derivatives (CD) segment in October 2008 and started capital market as well as futures and options segments and flagship index trading from February 2013.

The company's existing shareholders include Rakesh Jhunjhunwala, IFCI, IL&FS Financial Services, apart from a bunch of banks such as SBI, Axis Bank, Union Bank of India, Punjab National Bank, Bank of Baroda, Corporation Bank, among others.

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