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Wednesday, February 19, 2014

FTIL hits the roof on buzz of deal talks with Tech Mahindra

Financial Technologies (India) hit an upper circuit limit of 5% at Rs 326.20 at 11:05 IST on BSE on a media report that Tech Mahindra has shown interest in buying a sizeable equity stake in the company.

Meanwhile, the BSE Sensex was up 21.90 points, or 0.11%, to 20,656.11.

On BSE, so far 5.72 lakh shares were traded in the counter, compared with an average volume of 8.42 lakh shares in the past one quarter.

The stock hit a low of Rs 318.20 so far during the day. The stock hit a 52-week high of Rs 971.30 on 20 February 2013. The stock hit a 52-week low of Rs 102.05 on 30 August 2013.

The stock had outperformed the market over the past one month till 18 February 2014, falling 0.89% compared with the Sensex's 2.04% fall. The scrip had also outperformed the market in past one quarter, rising 71.37% as against Sensex's 1.04% decline.

The small-cap company has an equity capital of Rs 9.22 crore. Face value per share is Rs 2.

According to the media report, Tech Mahindra has hired consultants to carry out a due diligence of Financial Technologies (India) (FTIL). However, the report suggested that it is uncertain whether the ongoing negotiations will translate into a deal.

According to preliminary discussions, Tech Mahindra will subscribe to preferential shares issued by FTIL as well as buy a part of the equity stake controlled by its promoters, the report added.

As on 31 December 2013, promoters held 45.63% stake in FTIL.

Earlier a media report had suggested that Tech Mahindra was keen on buying Jignesh Shah-controlled FTIL if Jignesh Shah is asked to sell his stake in FTIL as part of the National Spot Exchange (NSEL) scam proceedings.

The report added that Tech Mahindra wants to re-gain its strength in the Banking, Financial services and Insurance (BFSI) segment which had been hit hard in the Satyam portfolio. FT may provide enough traction in this vertical.

Jignesh Shah is currently the chairman of FTIL which owns and runs NSEL where a Rs 5600 crore payment crisis is being probed by multiple agencies.

FMC in its order dated 17 December 2013 said that FTIL, the promoter and anchor share-holder holding 26% of the paid-up capital of the commodity exchange MCX, is not 'fit and proper person' to continue to be a shareholder of 2% or more of the paid-up equity capital of MCX as prescribed under the guidelines issued by the Government of India (GoI) for capital structure of commodity exchanges post 5-years of operation.

The FMC order of 17 December also stated that Mr. Jignesh Shah, Ex- Director, Mr. Joseph Massey, Ex-Director and Mr. Shreekant Javalgekar, Ex-Managing Director & CEO of MCX, are not 'fit and proper person' in terms of the directions issued under the Board Composition Guidelines issued by the Commission and as amended from time to time.

FTIL's net profit rose 27.6% to Rs 34.48 crore on 10.97% decline in net sales to Rs 79.97 crore in Q3 December 2013 over Q2 September 2013.

FTIL is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next generation financial markets.