FTIL exits MCX; completes 15% stake sale to Kotak Mahindra Bank

Written by Press Trust of India | Mumbai | Updated: Sep 30 2014, 15:53pm hrs
Financial Technologies (FTIL) today said it has completed the deal to sell its 15 per cent stake in commodity exchange MCX to Kotak Mahindra Bank for Rs 459 crore, marking the company's exit from the bourse.

"FTIL today completed the sale of 15 per cent equity stake in Multi Commodity Exchange of India (MCX) to Kotak Mahindra Bank for a consideration of Rs 459 crore. With this, FTILs shareholding in MCX is nil," Jignesh Shah-led company said in a statement.

Last week, FTIL concluded a long-term 10-year technology contract with MCX for providing software support and managed services on mutually agreed terms and conditions and further renewal as may be mutually agreed upon, it added.

The technology agreement with MCX paved the completing of the deal with Kotak Mahindra Bank.

"I am confident that Kotak Mahindra Group will contribute as significant minority shareholders towards the growth of exchange. We look forward to a constructive partnership with MCX as their technology partner," FTIL MD & CEO Jignesh Shah said in a statement.

India's largest commodity exchange MCX was set up by its erstwhile promoter FTIL in November 2003. The exchange became the country's first exchange to be listed in March 2012.

FTIL originally held a 26 per cent stake in MCX. It has divested stake in MCX after market regulator FMC had declared the company unfit to run any exchange in the wake of Rs 5,600 crore payment crisis at group company National Spot Exchange Ltd (NSEL).

The regulator had asked FTIL to reduce its stake in MCX to 2 per cent from 26 per cent.

To begin with divestment process, FTIL had sold 6 per cent stake in MCX, including about 2 per cent sale to billionaire investor Rakesh Jhunjhunwala, in two rounds for about Rs 220 crore, bringing down its shareholding to 20 per cent.

Then in July, FTIL announced sale of 15 per cent stake in MCX to Kotak Mahindra Bank and last month the company sold residual 5 per cent stake in the bourse for over Rs 200 crore.