Financial Technologies to offload 16.6% in IEX for Rs357 crore

Financial Technologies India Ltd (FTIL) has signed an agreement with a new group of investors to sell 16.6 per cent stake in Indian Energy Exchange (IEX) for Rs357 crore.

FTIL now holds 25.64 per cent stake in IEX and the sale will leave FTIL with the residual 9 per cent stake, which will be held in escrow account.

The deal values IEX about Rs100 crore lower at Rs2,150 crore.

FTIL had, in November last, entered into a share-sale agreement with a consortium of investors led by Chennai-based private equity firm TVS Capital Funds to sell the entire stake for about Rs577 crore, valuing IEX at Rs2,250 crore.

But the deal had to be called off due to non-fulfillment of certain contract terms, and the Economic Offences Wing of Mumbai police had raised an objection in the High Court.

On 12 June, the court allowed the company to sell the stake on the condition that the company deposited Rs84 crore within four weeks of deal. Following this, the company signed a new agreement to sell the stake. 

''We have entered into a new share purchase agreement with DCB Power Ventures Ltd, Kiran Vyapar Ltd, Agri Power and Engineering Solutions Pvt Ltd, Aditya Birla Capital Advisors Pvt Ltd (for and on behalf of Aditya Birla Trustee Company Private Ltd, trustees to the Aditya Birla private Equity Fund I and Aditya Birla Pvt Equity Sunrise Fund) for sale of 16.6 per cent stake for Rs357.06 crore,'' FTIL said in a statement on Friday.

The remaining 9-per cent stake will be kept in an escrow account and sold in due course, said the company.

Following the NSEL fiasco, the Central Electricity Regulatory Commission had, in May 2014, directed the company to sell its entire stake in the power exchange after it was declared not ''fit and proper'' to hold stake in exchanges by various regulators, including Sebi and the FMC.

FTIL's troubles started in 2013 after group company NSEL failed to settle trades worth Rs5,600 crore on its platform, sparking a crisis that saw the company's fortunes go into a tailspin.

Interestingly, the new agreement is also subject to fulfillment of certain conditions, including buyout of FTIL software application and other technology for IEX use. It also needs regulators' approvals.

The deal is expected to be closed within 60 days.

Last March, FTIL sold a part of its stake in IEX to Golden Oak (Mauritius), after which its holding dropped to 25.64 per cent.

IEX offers a platform for online electricity trading, and clearing and settlement operations. It has over 800 private generators and more than 2,800 open access consumers leveraging the exchange platform to manage their power requirements.