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Wednesday, April 16, 2014

MCX jumps as FTIL prepares to sell stake

MCX rose 4.78% to Rs 589.15 at 15:02 IST on BSE after stakeholder Financial Technologies (India) said it had received nine non-binding bids in the sale of its 24% stake in MCX.

Meanwhile, the BSE Sensex was down 116.39 points, or 0.51%, to 22,512.57.

On BSE, so far 13.20 lakh shares were traded in the counter, compared with an average volume of 5.86 lakh shares in the past one quarter.

The stock hit a high of Rs 604.15 and a low of Rs 562 so far during the day. The stock hit a 52-week high of Rs 1,015 on 6 May 2013. The stock hit a 52-week low of Rs 238.30 on 19 August 2013.

The stock had underperformed the market over the past one month till 11 April 2014, sliding 5.40% compared with the Sensex's 3.68% rise. The scrip had, however, outperformed the market in past one quarter, rising 15.66% as against Sensex's 9.01% rise.

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

Financial Technologies (India) (FTIL) on Saturday, 12 April 2014, said that the company has received non-binding bids from 9 prospective investors, which includes marquee Indian and global conglomerates for the proposed sale of its 24% equity stake in commodity futures exchange -- the MCX. The company said that the Restructuring Committee constituted by the board of directors of the company has completed the process of shortlisting of the parties with whom FTIL's appointed banker JM Financial will take the discussion forward. The Restructuring Committee also noted that every shortlisted bidders has requested for management interaction with MCX and customary due diligence of MCX as a pre-condition. Shares of FTIL were up 0.43% to Rs 363.50.

The restructuring committee has decided that it will finalize the bidder(s) by 25 April 2014 and will recommend the same to the board of FTIL, subject to the above mentioned management meeting and customary due diligence request of bidders being completed by MCX. FTIL said that the company is making all efforts with a view to complete the proposed sale of its 24% equity stake in MCX by 25 April 2014 and has now called for a meeting of its board of directors on 25 April 2014 for selecting the final bidder(s).

FTIL will write to the board of MCX seeking their co-operation for management interaction with the shortlisted bidders and the customary due diligence to enable the proposed sale within the defined timelines, FTIL said. FTIL will also write separately to the Forward Markets Commission (FMC) to seek their support and co-operation in the matter and will update them periodically on the progress of customary due diligence and interaction with management of MCX.

FTIL said that the company is confident that with the full support of the FMC and MCX it will be able to select the final investor(s) within the defined timeline of 25 April 2014, FTIL said in a statement.

FTIL currently holds 26% stake in MCX. After the Rs 5600-crore crisis at the National Spot Exchange last year, a former exchange of FTIL group, the FMC has said that FTIL cannot hold more than 2% in any commodity bourse in India.

Meanwhile, MCX announced after trading hours on Friday, 11 April 2014, that foreign institutional investors (FIIs) and qualified foreign investor-corporate hold a combined 19.86% stake in MCX on 4 April 2014, which is within the cap of 23% for this category. Foreign corporate bodies hold 7.54% stake in MCX as on 4 April 2014, which is within the cap of 26% for this category, MCX said.

MCX's net profit fell 71.2% to Rs 21.84 crore on 55.2% decline in net sales to Rs 55.85 crore in Q3 December 2013 over Q3 December 2012.

MCX is a dominant player in commodity exchanges in India. Its market share stood at 89% in the first half of the fiscal year ending 31 March 2014.