FTIL sells 5% MCX-SX stake, Rs 56 crore warrants for 88 crore

MUMBAI: Financial Technologies (FTIL) on Tuesday said that it has completely exited MCX Stock Exchange (MCX-SX), the stock market it had promoted four years ago, by selling its entire 4.9% stake and also 56.25 crore warrants to a consortium of 13 entities for Rs 88.4 crore. The sale is the fallout of the Rs 5,600-crore scam at NSEL, the now-defunct spot exchange that was promoted by FTIL, and the subsequent regulatory strictures that barred FTIL from being associated with any exchange in any meaningful manner.
In a statement to the exchanges, FTIL said it has sold 2.7 crore shares to celebrated investor Rakesh Jhunjhunwala. It has also sold the 56.25 crore warrants to Jhunjhunwala and another 12 entities, including Edelweiss Financial Services, Trust Investment Advisors, Nemish Shah, Madhuri Kela and SKS Capital & Research.
Interestingly in August, under regulatory pressure, MCX-SX had announced that it has cancelled the 56.25 crore warrants that FTIL was holding. Tuesday’s release did not elaborate how the same warrants were sold but said the sale was done “without prejudice to our (FTIL’s) legal rights and remedies”. Each warrant was convertible to one share of MCX-SX.
Post this sale, along with these 12 entities, another 5% in the exchange is held by MCX, the commodity exchange in which 15% was sold to Kotak Mahindra Bank, again under regulatory pressure. According to MCX-SX, as on September 30, Union Bank and IFCI, each holding nearly 13% in the exchange, were its largest shareholders. The other large shareholder was PNB, holding nearly 9% in the stock exchange. Another 14 banks and one financial institution, each held between 5% and 1.8% stake in MCX-SX.