Kotak Mahindra to lap up 15% stake in MCX for Rs 459 crore
Financial Technologies India Ltd (FTIL) originally held a 26 per cent stake in commodity exchange MCX.<br />
Mumbai: Jignesh Shah-led FinancialTechnologies today said it has signed an agreement to sell 15per cent stake in MCX to Kotak Mahindra Bank for Rs 459 crore.
Financial Technologies India Ltd (FTIL) originally held a26 per cent stake in commodity exchange MCX.
Earlier this month, it sold 6 per cent stake in MCX in tworounds for about Rs 220 crore, bringing down its shareholdingto 20 per cent.
After an agreement with Kotak Mahindra bank to sell 15 percent stake, FTIL is left with 5 per cent stake in MCX.
FTIL is divesting its 26 per cent stake in MCXaftermarket regulator FMC had declared FTIL unfit to run any exchange in the wake of Rs 5,600 crore payment crisis at groupcompany National Spot Exchange Ltd (NSEL).
The regulator asked FTIL to reduce its stake in MCX to 2per cent from 26 per cent.
"Subject to certain conditions to be fulfilled, includingregulatory approvals prior to closing of the transaction, FTILhas entered into a Share Purchase Agreement (SPA) to sell 15per cent stake in MCX to Kotak Mahindra Bank Ltd (KMBL) for atotal consideration of Rs 459 crore," FTIL said in astatement.
The company will continue with its divestment process tosell the balance 5 per cent stake subject to the receipt of binding bids and all regulatory and other approvals.FTIL said it had committed to divesting its holding inMCX.
This transaction culminates the majority of the divestmentprocess initiated by FTIL since 27 February, it added.
Commenting on the development, FTIL Non-Executive ChairmanVenkat Chary, said, "We are happy that Kotak Mahindra Bankwill become a significant minority shareholder in MCX and willcontribute towards the next phase of growth of MCX as aresponsible public shareholder.
"We are satisfied that we could divest to KMBL and wishboth MCX and KMBL a great future. FTIL will continue to remaina technology partner to MCX and will work closely with MCX totake MCX to even greater heights."
FTIL had appointed a restructuring committee to overseethis process, which appointed JM Financials as its investmentbanker and Ican as advisor.
Despite many challenges since initiation of the divestmentprocess, FTIL was successful in generating and negotiating abinding offer from one of India's largest private sectorbanks, KMBL, thereby endorsing the credentials of a strongworld-class institution promoted by FTIL, the company said.
Meanwhile, Kotak Mahindra Bank also issued an statementannouncing signing of an agreement to buy 15 per cent stake,worth Rs 459 crore, in the Multi Commodity Exchange (MCX),India's largest commodity exchange, from FinancialTechnologies Ltd (FTIL).
The bank, however, said the deal would be subject toregulatory approvals.
Commenting on the development, Kotak Mahindra BankExecutive Vice Chairman and Managing Director Uday Kotak said,"We are excited by the potential presented by the financialinfrastructure space in the country."
FTIL had promoted MCX in 2003 and it was the firstexchange to be publicly listed.
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Private sector lender Kotak Mahindra Bank posted a rise of 27 percent in consolidated net profit at Rs 1,789.24 crore for the quarter ended 31 March.
According to bulk deal data available with the National Stock Exchange (NSE) ING off-loaded a total of 1,27,45,702 stocks of Kotak Mahindra Bank.
Commodity bourse MCX today said that the capital markets regulator Securities and Exchange Board of India (Sebi) has relaxed norms to allow FTIL to bring down its stake to 1.99 per cent in the commodity bourse.