15 Mar, 2014
The probe by the Central Bureau of Investigation (CBI) may delay Financial Technologies' (FTIL) plan to sell its stake in MCX and make it tougher for MCX-SX to raise money through its ongoing rights issue.
While FTIL has put its holding in MCX on the block following regulatory directives, MCX-SX badly needs money to take care of a dip in net worth. SEBI is closely monitoring the situation since all exchanges are required to maintain a minimum net worth of Rs 100 crore. MCXSX's present net worth is around Rs 121 crore.
"The rights issue is on track and we have received a confirmation from shareholders for participation," said Saurabh Sarkar Sarkar, chief executive officer and MD, MCX-SX, at a press conference on Friday morning. "We have also received expression of interest from new investors and the exchange could exercise a preferential allotment, post the rights issue, if it is not entirely subscribed."
Sarkar did not reply to other questions from reporters. Sebi officials told ET that MCXSX's future depends on the outcome of the rights issue. Sarkar said some shareholders have shown interest in buying shares of MCX-SX and the rights issue would be open till the first week of April. Sources said some shareholders want to subscribe to the rights issue at a belowpar price. "Rights issue of MCX-SX may sail through and not be impacted by the CBI inquiry, which is related to other procedural matters and not the current working of the exchange," said SP Tulsian from Premium Investments. "There is appetite for stock exchange paper in the market and 90% shareholders in MCX-SX are non-controversial."
Sebi's concern stems from the fact that MCX-SX suffered a net loss of Rs 140.5 crore for the first nine months of financial year 2013-14. Effectively, the exchange is losing around Rs 15 crore every month. Sebi officials said a large portion in the net worth of MCX-SX is intangible assets and intangible assets under development compared to actual cash. Jignesh Shah-promoted FTIL and MCX hold 5% each in the stock exchange. FT, which was earlier categorised as a promoter shareholder, has now been classified as a public shareholder in MCX-SX.
Shah, along with other investors, who hold a 45.63% stake in FTIL, has hired an investment bank to find buyers for FTIL's 26% stake in MCX. But it's widely felt that as long as the group remains under the CBI scanner, it would be difficult to find a buyer. At current market price, FTIL's holding in MCX is valued at around Rs 1,400 crore.