Fidelity International has sold 2% stake in MCX to Passport India Investments (Mauritius) Ltd for an undisclosed sum. Post transaction, Fidelity’s stake in MCX will come down to 7% while Passport India’s shareholding will go upto 5%.

Fidelity had picked up around 9% in MCX in 2006 for $49 Mn, valuing the exchange at around $540 million. When NYSE picked up a 5% stake in MCX in 2008, the exchange was valued at $1.1 Bn. Citigroup is also selling its 5% stake in MCX to Ashmore Plc for for $40 Mn, valuing $800 Mn. It is exiting with a loss of 10% as it had paid $45 Mn for the 5% stake in 2007.

If a similar valuation is considered than Fidelity could fetch about $16 Mn for the 2% stake.

MCX promoted by Financial Technologies Ltd – is an electronic commodity futures exchange. MCX started operations in Nov’03. It offers trading in more than 40 commodities.

Financial Technologies holds 31% in the bourse. NYSE Euronext (5%), Citi (5%), Merrill Lynch (5%), Passport India (3%), IL&FS (5%), Corporation Bank (4%), SBI & its associate banks (9%), ICICI Group (3%), Nabard (3%), and other banks and financial institutions (18%) are the other shareholders in MCX.

Forward Markets Commission has capped the shareholding in the commodity exchanges. According to the regulations, a single domestic shareholder cannot own more than a 40% stake in new commodity exchanges for five years from the time of launch. This cap on single entity ownership will be reduced to 26% in five years.

The regulations also say that the foreign investors have to reduce their holdings in commodity exchanges to a maximum of 5% by June’10.

Transaction Reference:ET

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