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Six Private Equity Funds Show Interest in MCX-SX Stake Sale

28 August, 2009

India’s newest stock exchange MCX Stock Exchange Ltd (MCX-SX) has attracted interest from around six private equity funds for a 5% stake. The firms include General Atlantic, Fidelity International Ltd, hedge fund TPG-Axon, CME Group, Abu Dhabi Investment Authority (ADIA) and a group company of Singapore’s sovereign wealth fund Temasek, reports ET. This comes after London Stock Exchange (LSE) and New York Stock Exchange Euronext (NYSE) showed interest to pick up a 5% stake each in MCX-SX.

The promoters of the stock exchange, Financial Technologies (FT) and commodity exchange MCX, have already divested 30% stake to domestic public-sector and private banks and institutions, while the remaining 70% stake is with them. The promoters intend to bring down their respective stakes to 15% each, in line with regulations that limit promoter ownership in a stock exchange to 15%. 

Out of the divested 30% stake, a group of banks including Bank of India and Union Bank of India hold 25%, while the remaining 5% stake is with Industrial Finance Corporation of India Ltd (IFCI), which bought the stake for Rs 250 crore in July 2009.

In October 2008, market regulator Sebi gave approval to the exchange to commence trading in currency futures on the condition that the promoters would divest their stakes within a year’s time by September 30. In order to meet these guidelines, the promoters have appointed Deutsche Bank, Nomura and Antique Capital Markets as bankers for the divestment. Meanwhile, MCX-SX has also sought the regulator’s approval to start equities trading which is pending subject to the demutualisation.  

As of July, the daily turnover of MCX-SX has increased tenfold to Rs 3,838 crore, up from Rs.324 crore when it was launched in October 2008. 


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Six Private Equity Funds Show Interest in MCX-SX Stake Sale

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