The Multi-Commodity Exchange of India Ltd (MCX) shares surged in recent trading days on reports that a number of potential investors, including the Kotak Group, are keen on buying a stake in India’s leading commodity derivatives exchange.
After falling to its lowest level on August 19, the stock of MCX, a group entity of Jignesh Shah led Financial Technologies India Ltd (FTIL), has rallied as much as 88% to close at Rs 448.1 on Friday. During the period, the stock has hit upper circuit in 13 of 15 trading sessions.
Concerns of a spillover impact of the Rs 5,600-crore payment crisis at Financial Technologies subsidiary National Spot Exchange (NSEL) had taken a toll on the MCX stock. The scrip had slipped sharply in mid-August and was trading at a deep discount of 84% to its listing price of R1,387.
However, the recent rally has erased some of those losses and is being attributed to reports of strategic investors looking to increase their holding in India’s most profitable commodity exchange. FE could not independently ascertain whether investors had expressed an interest in buying stake in MCX.
“The Street is focusing on whether the promoters of FTIL would be forced to consider a stake sale in MCX— the flagship business — to repay some of the NSEL outstanding,” said an analyst tracking the stock.
Expectations have also built up due to FMC’s suggestion that the ‘fit and proper’ status of the promoters of MCX may come into question. While Financial Technologies, the flagship company of the FT Group, owns nearly 100% stake in the NSEL, it holds 26% in MCX. Other prominent institutions that own more than 2% stake in MCX as of June 2013 include Euronext — the European arm of NYSE Euronext -- IFCI and Nabard.