NSE decides to sell stake in MCX

The National Stock Exchange (NSE) has decided to sell the stake that it owns in India’s largest commodity futures bourse, Multi-Commodity Exchange (MCX), said reliable sources.

In fact, NSE has written to MCX, saying it would like to exit from the commodities exchange when the latter do the offer for sale or initial public offer (IPO) next. NSE, which is the largest stock exchange in India, had bought a 2.56 per cent stake in MCX in May 2005, amounting to 1 million equity shares of Rs 10 each at the time.

Joseph Massey, chief executive officer of MCX, said that he was not aware of the letter, but added that it is a practice to write to all shareholders asking them whether they want to sell their stake any time the IPO is made.

The decision to sell the stake in MCX comes at a time when NSE has just commenced its currency futures segment. MCX is also expected to begin currency futures trading shortly through MCX Stock Exchange, where MCX and Financial Technologies will be the shareholders. The Bombay Stock Exchange (BSE) will commence currency futures trading on October 1. Interestingly, it is for the first time that all three exchanges will be competing within a single trading segment.

MCX had filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) in February 2008. According to that DRHP, NSE owns 20 lakh equity shares of Rs 5 each, amounting to 2.56 per cent in MCX after the equity shares were subdivided in September 2007. After the IPO, NSE’s stake would have gone to 2.38 per cent.