Embattled Financial Technologies (India) Ltd (FTIL) has managed to close a deal with Kotak Mahindra Bank to sell its residual 15 per cent stake in the Multi Commodity Exchange (MCX) for ₹459 crore.
Shares jumpWith this, FTIL has managed to sell its entire 26 per cent shareholding in MCX for about ₹900 crore. The deal lifts the embargo on MCX to launch contracts for the next calendar year.
Shares of FTIL and MCX jumped 5 per cent and 4 per cent to ₹228 and ₹816, respectively. Kotak Bank has acquired MCX shares at about ₹664 apiece.
Earlier, FTIL concluded a long-term 10-year technology contract with MCX for providing software support and managed services on mutually agreed terms and conditions, and a further renewal as may be mutually agreed upon, FTIL said in a statement on Monday.
FTIL was forced to offload its holding in the exchange after the Forward Markets Commission declared it as ‘unfit’ to hold stake in the commodity exchange after its arm, National Spot Exchange, failed to settle trade worth ₹5,600 crore on its platform.
‘Constructive partnership’Jignesh Shah, Managing Director, FTIL, said the Kotak Mahindra Group would contribute as a significant minority shareholder towards the growth of the exchange. “We look forward to a constructive partnership with MCX as their technology partner,” he said.
Besides reducing the term of the technology contract, MCX will now pay FTIL a fixed charge of ₹1.5 crore a month, including managed services payable in advance on a semi annual basis. Earlier, it was paying ₹2 crore a month. FTIL will also get a variable charge of 10.3 per cent of gross transaction fees, compared with 12.5 per cent earlier. MCX paid about ₹60 crore to FTIL for receiving technological support and services last fiscal.