UCX eyes FTIL's stake in MCX

We have got backing of existing investors, mutual funds and FIIs for FTIL's stake in MCX, said an UCX official

Universal Commodity Exchange (UCX), the country’s sixth largest in this segment, is eyeing an anchor investor’s stake in the largest one, Multi Commodity Exchange (MCX).

The latter’s promoter, Financial Technologies, currently has 26 per cent, the maximum an anchor investor can hold in any exchange recognised by the Forward Markets Commission (FMC), the commodity derivatives markets regulator. A senior UCX official said, “We have got the backing of existing investors, mutual funds and foreign institutional investors (FIIs) for FTIL’s stake in MCX. Talks are in a preliminary stage.”

Investigating the Rs 5,600-crore payment crisis in National Spot Exchange, promoted by FTIL, the FMC said the latter did not meet the “fit and proper” criterion to be an anchor investor. It directed FTIL to reduce stake in MCX to two per cent of paid-up equity capital from the existing 26 per cent. The MCX board decided last week to implement the order and asked FTIL to reduce stake as directed, within a month. Also, the board set up a committee to look for an anchor investor.

FTIL has challenged the FMC order at the high court here. A hearing is scheduled on January 16. “We are waiting for the HC (response) to take a final call on acquiring the FTIL stake,” said the UCX official. The source valued the deal for a 24 per cent stake at around Rs 700 crore, at the market price of MCX shares. After huge volatility, these closed on the BSE exchange on Tuesday at Rs 185.40, a gain of 1.6 per cent. MCX shares ended the day at Rs 478.80 each, up 0.9 per cent from Monday..