Hedge fund Passport Capital has sold 1.6 per cent stake for Rs 62 crore in Financial Technologies (India) Ltd, which is behind the Multi Commodity Exchange of India (MCX). Passport, which also holds a stake in MCX, has been cutting its stake over the last 18 months from its peak of 10 per cent in March, 2009. With the latest selloff, its stake will now fall to around 1.2 per cent.
The share price of Financial Technologies closed at Rs 872.6, up nearly 6 per cent on June 29. The bulk deal, in which Reliance Growth Fund picked up the stake, was done at a discount to this price at Rs 810.05 per share. Other PE shareholders in Financial Technologies include Citigroup Venture Capital, which holds nearly 3 per cent stake.
Passport Capital had started building up the stake in Financial Technologies during January, 2007, when its share was trading at around Rs 1,700. The hedge fund continued to build up its stake in the firm as its stock price reached over Rs 3,000 per share and was trading between Rs 2,400 and Rs 2,700 during late 2007, thus increasing its stake to 4.23 per cent by March, 2008. The fund had later averaged out its investment by buying more shares after the financial meltdown in 2008, raising its stake to 10 per cent in March, 2009.
Financial Technologies reported 7 per cent increase in standalone income to Rs 357 crore for FY11.
San Francisco-based Passport Capital LLC, founded by John H. Burbank III in 2000, manages approximately $4.7 billion in assets. It has invested in other Indian companies like VA Tech Wabag and Koutons Retail.