Financial Technologies slips after NSEL defaults on dues

Financial Technologies (India) fell 5.87% to Rs 133 at 10:47 IST on BSE after the company's subsidiary National Spot Exchange on Tuesday, 20 August 2013, defaulted on payments to its investors.

Meanwhile, the BSE Sensex was up 192.10 points, or 1.05%, to 18,438.14.

On BSE, 10.36 lakh shares were traded in the counter compared with average volume of 7.52 lakh shares in the past one quarter.

The stock hit a high of Rs 140 and a low of Rs 113.05 so far during the day. The stock hit a 52-week low of Rs 105.50 on 2 August 2013. The stock hit a 52-week high of Rs 1223.80 on 13 November 2012.

The stock had underperformed the market over the past one month till 20 August 2013, sliding 77.61% compared with the Sensex's 9.45% decline. The scrip had also underperformed the market in past one quarter, falling 83.32% as against Sensex's 9.78% fall.

The small-cap company has an equity capital of Rs 9.22 crore. Face value per share is Rs 2.

Financial Technologies (India)'s (FTIL) subsidiary, National Spot Exchange (NSEL), on Tuesday, 20 August 2013, sacked its managing director and CEO Anjani Sinha and six other top executives on a day it failed to meet the first scheduled repayment to investors.

NSEL could settle only Rs 92.12 crore out of the scheduled of Rs 174.72 crore payment it had committed to the sector regulator Forward Markets Commission (FMC). This was largely because nine NSEL members failed to pay their dues.

The NSEL had to shut down its operation early this month following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension. It has given eight-month plan to settle Rs 5574.31 crore to investors. NSEL is scheduled to make a payout every Tuesday for 30 weeks, ending in March 2014. FTIL is one of the two promoters of the NSEL.

Meanwhile, some media reports suggested that after the default, FMC shot off a letter to NSEL on Tuesday, 20 August 2013, warning all its board members that their status as a 'fit and proper' person is at serious risk and warned them of consequential actions. FMC also ordered all NSEL board members to take serious note of the facts brought to their notice and to take all necessary steps to comply with the directions of the commission.

The NSEL board should take complete responsibility for the completion of settlement of all outstanding trade at the exchange, the regulator warned. The disqualification under 'fit and proper' criteria would mean that NSEL board members will have to resign from all the exchanges on which they are board members, reports added.

FTIL's net profit rose 6.84% to Rs 81.20 crore on 15.44% growth in total income to Rs 169.54 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced after market hours on Tuesday, 30 July 2013.

FTIL's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 17% to Rs 120 crore in Q1 June 2013 over Q1 June 2012. The company's profit before tax (PBT) surged 32% year on year (YoY) to Rs 110 crore in Q1 June 2013.

FTIL is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next generation financial markets, that are transparent, efficient and liquid, across all asset classes including - equities, commodities, currencies and bonds among others. The group operates one of the world's largest networks of nine exchanges connecting fast-growing economies of Africa, Middle East, India and South East Asia. The group also has five ecosystem ventures to address upstream and downstream opportunities around exchanges, including clearing, depository, information vending and payment gateway, among others.

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