FT to reduce MCX stake by Sept, IPO in a year

Financial Technologies (FT), the promoter of India’s largest commodity exchange, Multi Commodity Exchange (MCX), will reduce its stake in the latter to 26 per cent by September. MCX will also come up with an Initial Public Offer (IPO) within a year, said Lamon Rutten, managing director and chief executive officer, here yesterday.

The divestment is needed to comply with the rules of the commodity market regulator, the Forward Markets Commission. The Jignesh Shah-led FT currently has 31 per cent share in the commodity bourse and under the rules, no anchor investor is allowed to hold more than 26 per cent stake in a commodity exchange. MCX has a 83 per cent share in the the commodity futures market.

Regarding the IPO proposal, Rutten said: “We want to do it as fast as we can and are preparing to file a draft red herring prospectus with the Securities and Exchange Board of India. Though the process will take its time, we would like to do it within a year.”

He said MCX was not doing the IPO to raise money but to improve corporate governance. “It’s not that we need money now, but if MCX gets listed, it can easily raise money in future, if necessary.”

The bourse saw a turnover of Rs 87 lakh crore last year and expects it to touch Rs 100 lakh crore this year. “The average daily turnover of MCX in the past three months was around Rs 40,000 crore. We have about 2,100 members now and are in expansion mode. We are also the sixth largest commodity exchange in the world,” he added.