MSEI to raise Rs 100 crore from rights issue

The stock exchange's and its clearing corporation's networth will also go up

Metropolitan Stock Exchange of India (MSEI, earlier known as MCX-SX) launched a rights issue of 1:1 on Tuesday, which is expected to raise Rs 100 crore. This will also help it increase the net worth of its clearing corporation.

Sources said MSEI would issue 1,183,388,166 equity shares with face value of Rs 1 each aggregating Rs 118.3 crore. However, MCX, one of its erstwhile promoters, will not be able to participate as it has not been allowed to increase stake in MSEI. Even if some other shareholders keep off, the exchange could raise Rs 100 crore from the rights issue, ending on July 8, sources said.

MSEI’s clearing corporation has a networth of around Rs 30 crore, which it has to increase to Rs 100 crore. MSEI is also losing its market share and it needs funds to spend for reviving its share. It has a plan to incentivise by introducing market-making incentive scheme for increasing volumes.

The BSE has been able to revive its shares by such schemes.

At present, MSEI has a net worth of Rs 117 crore. MCX has not been able to sell its warrants so far and it has not been able to convert them into equities in the exchange. MCX has time till June 19 to sell, failing which the warrants will get extinguished.

In both the scenarios, MSEI’s net worth will go up by Rs 59 crore. However, if MCX warrants are cancelled, “book value of the MSEI will go up and help public sector banks such as State Bank of India (SBI), Union Bank of India, Punjab National Bank, Bank of Baroda, and Corporation Bank as they value their investments in unlisted companies on book value”, said an industry analyst. Current book value of MSEI is Rs 1.10, which could go up to Rs 1.60.

According to the latest shareholding pattern, the company’s existing shareholders include Rakesh Jhunjhunwala, Industrial Finance Corporation of India, IL&FS Financial Services and a host of banks such as SBI, Axis Bank, Union Bank of India, Punjab National Bank, Bank of Baroda, Corporation Bank, among others.

MSEI, which has 1,100 companies listed with it under the permission to trade, said that it had added 100 more to its trading platform.