Mumbai: India’s newest stock exchange, MCX Stock Exchange Ltd (MCX-SX), has completed the process of reducing the stake of its promoters, Financial Technologies (India) Ltd (FTIL) and Multi Commodity Exchange of India Ltd (MCX), paving the way for the bourse to begin trading in equities.
At the end of the divestment process that began in July 2009, 21 investors, including 18 banks, will together hold a 90% stake in MCX-SX. Promoters FTIL and MCX will own 5% each.
MCX-SX has also expanded its board from 12 to 18 members by inducting nominees from the investor banks and financial institutions, following approval from the Securities and Exchange Board of India (Sebi) and the Union government.
MCX-SX was recognized by Sebi on 16 September 2008 and began operations on 7 October 2008. It has made a mark in currency derivatives trading, dividing the market almost equally with the National Stock Exchange.
The exchange was in the process of completing its compliance with Sebi’s Manner of Increasing and Maintaining Public Shareholding in Recognised Exchanges (MIMPS) Regulations 2006 in order to start operations in other segments of the capital market, subject to regulatory approvals.
The exchange was given time till September to comply with MIMPS Regulations. That process is now complete after the divestment and reduction of capital according to the Companies Act, following approval by the board and all shareholders in an extraordinary general meeting, and the Bombay high court.
IFCI Ltd, the state-owned financial institution, has emerged as the largest shareholder with 13.23%. Union Bank of India with 11.5% and Punjab National Bank with 9.2% are the other large shareholders. IL&FS Financial Services Ltd owns 5% in MCX-SX.
Eight public sector banks— Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Corporation Bank, Indian Bank, Indian Overseas Bank and Oriental Bank of Commerce—own 4.6% each.
Syndicate Bank (2.3%), HDFC Bank Ltd (2.21%), State Bank of Indore, United Bank of India, Vijaya Bank (1.84% each) and UCO Bank ( 0.46%) are the other share holders.