MCX-SX extends rights issue till April 30

MCX Stock Exchange (MCX-SX), facing legal battles, today extended the subscription period for its rights issue till April 30, citing a request from banks.
The response to the rights issue has been encouraging and the exchange has started receiving funds on account of the same, a release from the troubled exchange said, adding the subscription period has been extended to April 30.
"The shareholding banks need to seek clearance from their investment committees, the board and RBI. This is a time consuming process and a few banks have requested the exchange to extend the deadline of subscription to the rights issue," it said.

An exchange official said the company will mainly focus on the currency derivatives segment now. MCX-SX will be able to generate the necessary funds and rights issue is not the only way to infuse capital into the system.
The exchange is confident of raising Rs 200 crore via rights issue. Beyond that, it has a plan B of preferential placement, strategic investors, mergers, which is for the long term, he added.
In the first phase of its fund raising initiative, MCX-SX had announced its rights issue in the ratio of 2:1 equity shares held by the existing shareholders. The exchange plans to mobilise Rs 200-250 crore after the issue.

Post-rights issue, the exchange plans to rope in new foreign investors as strategic partners. A few international exchanges and large liquidity providers have evinced interest in the Exchange which is a positive development, he said.

The other option on the anvil is a merger with a national or regional stock exchange which is expected to bring in a lot of synergy, consolidation of net worth as well as reduction in cost and increase in volumes, the official said.
Many institutional investors earlier preferred to stay away from the rights issue due to FTIL-promoted National Spot Exchange (NSEL) facing Rs 5,600 crore payment crisis, and resignation of MCX-SX Chairman GK Pillai after CBI began an inquiry into the grant of licence to the bourse by Sebi.

FTIL and MCX were among the original promoters of MCX-SX, the country's youngest exchange, and following a restructuring they were shifted to public shareholder category.
The newly-appointed MCX-SX management has taken a slew of measures to improve the balance sheet. These include negotiating technology agreements with vendors and temporary suspension of the liquidity enhancement scheme.