Home / Market / Stock-market-news /  MCX sells a part of its warrants of MSXI

Multi Commodity Exchange of India Ltd (MCX) on Thursday said it had managed to sell a part of the convertible warrants it holds in Metropolitan Stock Exchange of India Ltd (MSXI) before their expiry on 19 June. MSXI was earlier known as MCX Stock Exchange Ltd.

It could not be immediately confirmed whether the remaining warrants have expired.

The country’s largest commodity exchange has sold nearly 148.28 million warrants, according an MCX statement. On 14 June, it had issued an advertisement seeking applications for the sale of 400 million warrants at a minimum quote of 1.10 per warrant.

“...the company has sold 148,277,938 warrants of Metropolitan Stock Exchange of India Ltd (MSXI) convertible into 148,277,938 equity shares of MSXI to the various investors subject to the applicable provision with respect to ownership of Stock exchanges under the Securities Contracts (Regulations) Stock Exchange and Clearing Corporations) Regulations, 2012," MCX said in a stock exchange notification.

In March, MCX had sold 9.02 million warrants of MSXI to IL&FS Financial Services Ltd at 2.50 each, according to a stock exchange notification. Even before that, the commodity exchange had sold 21.52 million warrants of MSXI to IL&FS.

According to the disclosures made by MCX in its latest financial statements, it held 48.21 million shares representing a 4.14% stake in MSXI, along with 582.58 million warrants. If all warrants were converted into shares, MCX’s stake in MSXI would have risen to nearly 36%.

In a statement issued on 9 June, MCX had clarified to BSE that the warrants would expire on 19 June if the Securities and Exchange Board of India (Sebi) did not allow an extension. As part of its response, MCX clarified that as per rule 16(2) of the Securities Contracts (Regulation) (Stock Exchanges And Clearing Corporations) Regulations, 2012, any holding in an exchange in excess of the specified limit would expire in a period of three years from the date of the notification of the regulations. The rules were notified on 20 June 2012.

In an order dated 19 March 2014, Sebi directed MCX to sell its holding in MSXI and its clearing corporation. The order followed the capital markets regulator’s probe into the 5,574.35-crore fraud at the National Spot Exchange Ltd (NSEL) in which Financial Technologies India Ltd (FTIL) held a 99.99% stake. FTIL, which has now completely sold its stake in MCX, held 26% in the commodity bourse when Sebi passed the order.

As part of the notes included in the financial statement for the year ended 31 March, MCX said that it wrote to Sebi on 30 April and 4 May that the exchange is no more a person acting in concert with FTIL and so should be “permitted to hold as much as 15% of the paid-up capital of MSXI and be granted extension of time till 31 December 2015 to hold its warrants".

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