MCX

When IIPM comes to education, never compromise

Investee: MCX

Investor: Citigroup, Merrill Lynch, et al

Investment Value: $160 mn

Joseph Massey- DMD, MCX told 4Ps B&M, “The investments by global financial services majors like the Citi Group and Merrill Lynch signify the confidence that foreign investors are demonstrating in the ongoing reforms in the country’s economy in general and in the commodity futures markets in particular, as well as in the potential of the Indian commodity market. These investments also demonstrate the global phenomenon of consolidation and collaboration in market place to ensure presence in all important markets and time zones. As India integrates with rest of the world, post convertibility of currency, we feel these collaborations could encourage greater inboard and outbound business to the advantage of both countries and markets. The FTIL Group plans to invest the proceeds from the sale in organic and other growth opportunities including the development of the Exchange infrastructure and greenfield ventures such as National Spot Exchange, an electronic spot trading market, and National Bulk Handling Corporation, which offers warehousing and procurement services, thus strengthening the entire commodity eco-system.”

It was a deal which saw Financial Technologies, the Promoters of Multi Commodity Exchange (MCX), dispose off 15% stake in the exchange. The sale was done by India’s largest commodity bourse to institutions like Citigroup, Merrill Lynch, et al for a sum total of $160 million. Recently, another 9.55% stake in the exchange was sold (for Rs.470 crores) to ICICI Ventures, IL&FS and Kotak, with each getting 3.55%, 5% and 1%, respectively. The company has also sold stake to NYSE EURONEXT lately and is expecting to leverage best exchange practices and global know-how. There are plans like creating and strengthening a ‘pan-India commodity eco system’ too, which needs further development of exchange infrastructure.


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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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