FTIL to continue unlock value in various exchange ventures

Financial Technologies India Ltd, promoter of the country's top commodity bourse MCX, today said it would continue to unlock value in its various ventures by broadening their investor base.

As part of its core business strategy, FTIL promotes and invests in new exchange, technology and ecosystem that utilise its technological capabilities and domain expertise towards creating world class enterprise, the firm said in a filing to the BSE while declaring its June quarter results.

FTIL, a dominant player in the exchange and related technology businesses, said the investment in such venture is assessed for its risks and is limited to a pre-determined level and will generate returns after they start ramping-up operations in about 2 to 4 years time frame.

"The company, as part of its non-liners business model, will continue to unlock value by broadening the investor base of its ventures," it said.

At the end of June quarter, FTIL has investments of about Rs 923.48 crore in certain subsidiaries and a JV entity and loans and advances of nearly Rs 37.67 crore are due from some of these companies, according to the data available with BSE.

These entities have continuing losses (share of aggregate losses to date Rs 273.34 crore) including on account of expensing out start-up costs and costs relating to Research & Development (R&D) activities.

However, FTIL said, it is hopeful that these entities would result into profit once they will execute their business plans/start of operations.

"The company expects that investments in these entities will be unlocked at appropriate times," it said.

FTIL will soon be launching trade in three exchanges -- the Singapore Mercantile Exchange, the Global Board of Trade, Mauritius (GBOT) and the Bahrain Financial Exchange (BFX).

FTIL is also the promoter of the country's top commodity exchange MCX and also of MCX-SX, which is at loggerheads with the capital market regulator SEBI for delay in granting nod to start operations for new segments.

MCX-SX says that it has met all the regulatory requirements by offloading the shares to a clutch of banks and financial institutions and FTIL and MCX have only five per cent each in it, as needed by SEBI rules.

Earlier this year, MCX-SX that started with FTIL and MCX as the two key shareholders, announced a capital reduction exercise through a scheme of reduction of capital, as per which the promoters cancelled some shares and converted some into warrants.

Pursuant to this exercise, stakes of FTIL and MCX fell to five per cent each.

Multi Commodity Exchange (MCX) has already received the permission from commodity market regulator FMC for launching the initial public offer (IPO).

FTIL today posted an over two-fold jump in net profit to Rs 45.15 crore for the first quarter ended June 30.