UCX-led group keen to buy FTIL stake in MCX &merge itself

Universal Commodity Exchange-led consortium has shown interest in buying the promoter FTIL's stake in the crisis-hit MCX and proposes to merger both the bourses.

 

The UCX's offer comes after commodity markets regulator FMC asked Financial Technologies India Ltd to reduce its stake in MCX from 26% to 2% or below. The MCX Board on December 27 last year had advised the FTIL to bring down its stake within one month.

 

According to sources, UCX-led consortium - which consists of private equity firms and financial institutions, has approached the Forward Markets Commission with a proposal of merger of two bourses and buying out FTIL stake.

 

However, sources said that any progress in the discussion would be subject the Bombay High Court order, which is hearing a petition filed by FTIL and its chief Jignesh Shah contesting the FMC order declaring them not fit to run any exchange in the country.

 

In view of Rs 5,500 crore payment crisis at NSEL, sister concern of MCX, market experts feel that there is a need for consolidation in the commodity futures exchanges.

 

The consolidation is also seen as necessary against the backdrop of lower turnover at the recently launched national commodity bourses such as ICEX, ACE and UCX.

 

While MCX is the country's largest commodity exchange, UCX got permission to launch the new exchange only last year. Still, UCX has given the proposal for merger as FTIL group including MCX are facing a crisis due to the NSEL scam.

 

FMC in an order issued last month had said that Shah and his firm FTIL were not 'fit and proper' to run any exchange in the country and charged him of being the "highest beneficiary" in the NSEL scam.

 

The regulator held that FTIL is not fit to hold anything more than 2% shareholding in the MCX.