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Capital Market | 3 September 2013

Bank Of India Sells Entire Stake In MCX

by Tilak Devadiga
Bank Of India Sells Entire Stake In MCX
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Bank of India sold its entire holding in MCX of 1.03% by selling the 5.25 Lac shares which it held at R392.6 a piece through an open market transaction. The transaction was executed on NSE for a total of R20.6115 Cr.

As on June 2013, NABARD(3.06%), HDFC bank (1.03%), BCCL(2.4%), Union bank(1.03%) are among other shareholders of the exchange.
Last week NSE had sold off its entire stake in MCX.

MCX is promoted by Jignesh Shah of Financial Technologies who also promotes the crisis ridden NSEL.

The stock prices of the MCX have been falling due to the NSEL fiasco. NSEL is a JV between FT and NAFED and was set up to provide an electronic platform to farmers and others for spot market trading in agriculture and other commodities, but it later emerged that some short-duration forward contracts were also being traded there.

NSEL was also seen struggling to recover dues from its members had suggested brokers and investors that they take a haircut of of R1,100 Cr or close to 20% of the total outstanding of R5,573 Cr. Due to this, it had to suspend trading following a government directive.

The exchange is also undergoing government investigations for a possible scam.

The sale by Bank of India comes amidst NSEL’s default on the second payout for settling R 5,600 Cr of dues after suspending trade on July 31 following the government's directions.

Last week, MCX Chairman Venkat Chary and five other directors of the commodity exchange resigned following implementation of new guidelines, including a bar on persons over 70 years of age holding board positions.

Other deals ;

  • BNP Paribas Arbitrage had bought 6.4 lac shares of Multi Commodity Exchange through bulk deal transaction on NSE for more than R15 Cr. It has acquired 1.25% stake in the company.
  • Swiss Finance Corporation Mauritius has bought 473837 shares of Multi Commodity Exchange through a bulk deal transaction on NSE.
  • Financial Technologies was in talks with PE investors to sell 6% stake in Indian Energy Exchange to pare its stake down to 25% in order to comply with electricity regulator

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