Blackstone's FT bet goes haywire

Several other institutional investors, mutual funds like Reliance Capital and Birla Sunlife staring at huge losses

Institutional investors which had put money into Financial Technologies (FT), owner of several commodity bourses, are ruing their bets, in the wake of the spate of events involving the National Spot Exchange Ltd (NSEL).

The stock is down nearly 80 per cent from its purchase price. Blackstone, the US-based private equity investor, had bought a six per cent stake in FT during the September 2012 quarter. And, two quarters later, another one per cent. FT's average stock price during the July-September 2012 period was Rs 810, valuing this stake at Rs 227 crore.

The shares ended on Friday at Rs 151.25 (it touched a low of Rs 105.5), a mark-to-market (revaluing assets at current prices) loss of nearly Rs 185 crore. FT's shares have fallen 72 per cent in the two days after it announced suspension of trading in all contracts, other than e-series in NSEL, its unit, and deferred client payments.

It couldn't be ascertained whether Blackstone had offloaded its holdings in the past two sessions. At the end of the June quarter, its shareholding in FT was 7.02 per cent.

Apart from Blackstone, several other institutional investors, such as Reliance Capital and Birla Sun Life, are also staring at huge losses. Reliance Capital had a four per cent holding in FT at the end of the June quarter. It had started accumulating these shares during 2009 and 2010, when the stock averaged a little over Rs 1,000.

Birla AMC had bought a one per cent stake in FT during the June 2013 quarter, when the share had averaged Rs 791.