Merrill Lynch, Citigroup buy 10% in MCX for Rs 480 cr
Merrill Lynch, Citigroup buy 10% in MCX for Rs 480 cr 28 Sep, 2007, 1637 hrs IST, PTI
MUMBAI: Global financial services firms Merrill Lynch and Citigroup have picked up five per cent stake each in the country's biggest commodity exchange MCX for a total of about Rs 480 crore.
Financial Technologies (India) Ltd, the parent company of Multi Commodity Exchange of India, sold the stake. FTIL has also entered into agreements to offload three per cent and two per cent stake to two foreign funds - Passport India Investment (Mauritius) and GLG Financials Fund, respectively.
The transactions put the enterprise value of MCX at over USD 1.1 billion (Rs 4,400 crore).
FTIL will get about Rs 720 crore from selling 15 per cent stake in MCX, an exchange official said. With the sale, FTIL's shareholding in MCX will come down to 49 per cent, he added.
The divestment by FTIL in MCX has come even though the government is yet to formulate guidelines on regulating foreign equity in Indian commodity exchanges.
In the absence of any guideline, the commodity market regulator Forward Markets Commission had asked the exchanges to maintain status quo till proper guidelines were issued.
However, MCX officials said necessary approval has been taken from FMC and other authorities.
When contacted, FMC Chairman B C Khatua said the approval is conditional. "We have approved the stake sale on the condition that they have to conform to the guidelines when they come," Khatua said.
He said the guidelines on FII stakes in commodity exchanges is also expected to be similar to the ones brought out by SEBI for stock market. FIIs can invest up to five per cent each in stock exchanges.