A day after Shah's arrest, FTIL shares hit lower circuit

The Financial Technologies India Ltd (FTIL) stock on Thursday hit the five per cent lower limit on the BSE. This followed founder and chairman Jignesh Shah and Shrikant Javelgekar, former managing director and chief executive of Multi Commodity Exchange (MCX), being arrested by the city police on Wednesday for investigation into the Rs 5,600-crore payment crisis at group company National Spot Exchange Ltd (NSEL).

On Thursday, shares of FTIL closed five per cent lower at Rs 276.7 on the BSE, the lowest since February 13. Shares of MCX (in which FTIL has 26 per cent stake) closed seven per cent lower at Rs 496.35, the lowest close since April 1.

“The volumes of trades conducted at NSEL were linked with the income of FTIL, and the promoter of NSEL was able to open other exchanges from the income generated through the NSEL platform,” Additional Commissioner of Police (Economic Offences Wing), Rajvardhan Sinha, had said after the arrests on Wednesday.

The now-defunct NSEL used to contribute almost 60% of the revenues of FTIL.  

FTIL owns and operates stock exchanges and is also a provided of trading-related software for the financial market. Following the NSEL scam, FTIL has embarked upon a drive to divest its holding in various exchanges, including commodity bourse MCX and equity exchange MCX Stock Exchange (MCX-SX).

Market experts said Shah's arrest could delay FTIL's plan to sell its stake in exchanges.

“If Shah is granted bail, the situation may not get adverse. If he is denied bail and is sent to judicial custody, then the sale can probably take longer,” Deven Choksey, MD, KR Choksey Shares & Securities told Bloomberg.