MCX-SX looks to bring in new investors

May raise Rs 200 crore through preferential allotment

 

MCX Stock Exchange (MCX-SX) has said it might look to meet some of its capital requirements through funds raised from new investors. A decision on this would be taken after the company’s rights issue, scheduled to be completed by the end of this month.

The company was said to be looking to raise Rs 300 crore through a rights issue to existing investors and Rs 200 crore from new ones, sources said. “The rights issue is on track and we have received confirmation on participation from several shareholders,” said a statement issued by the exchange.

Among the major stakeholders in the exchange are IFCI (13.2 per cent), Union Bank of India (11.47 per cent) and IL&FS Financial Services (9.18 per cent). Other stakeholders include HDFC Bank, Axis Bank and Bank of Baroda.

“The outcome of the rights issue will be made public upon its completion by end of this month. Meanwhile, we have also received expression of interest from new investors and the exchange could exercise a preferential allotment after the rights issue, if it is not entirely subscribed,” the statement added.

Financial Technologies India and MCX hold five per cent stakes each in MCX-SX. Their overall combined stake, including warrants, stands at about 70 per cent. The entities, reclassified from promoter to public shareholders, are likely to sell stake in MCX-SX, it is said.

Shareholders had suggested a cut in the initial share price on account of the fact that the exchange wasn’t making profits and volumes in its currency segment had been declining. However, the exchange is said to be hopeful of a pick-up in volumes if regulatory curbs introduced last year on currency trading are removed. Recently, it had launched operations in interest rate futures.

For the first nine months of FY13, MCX-SX recorded a profit of Rs 31.5 crore; for the corresponding period of this financial year, it recorded a loss Rs 140.5 crore.

The exchange’s board has been seeking to cut costs to shore up its balance sheet. “Through the last few months, the board has been successful in rationalising costs in a significant manner. We are confident the policy reforms in the currency derivatives segment will give the desired boost to volumes, resulting in a turnaround in the balance sheet,” said a statement issued by the exchange on Friday.