Fidelty sells major stake in MCX to Reliance MF
28 Mar 2009
Reliance Mutual Fund, a Anil Dhirubhai Ambani Group (ADAG) company, on has bought a 5.23-per cent stake in Financial Technologies, the promoter of India's largest commodity exchange, the Multi-Commodity Exchange of India (MCX).
The shares were bought from the US-based parent Fidelity, the investment management group, at Rs502.50 per share. Fidelity, which holds 10.65 per cent in FT, sold 8.20 per cent of it, or 77 per cent of its stake, in a block deal for Rs188.80 crore. Apart from Reliance MF, several high net-worth individual investors bought the balance of 2.97 per cent.
Five years back, another ADAG company, Reliance Capital, had purchased FT shares which were later sold at higher price levels.
Reliance ADAG has strategic interests in the exchanges business. Besides holding stake in the Hong Kong Mercantile Exchange, it also holds a 10-per cent stake in India's National Multi-Commodity Exchange through its arm Reliance Money. It also plans to soon start a spot commodity exchange under its subsidiary, Reliance Spot Exchange Infrastructure.
Sundeep Sikka, chief executive officer, Reliance Mutual Fund, said, ''The investment will be allocated across various mutual fund schemes that are currently managed by the asset management company.'' He, however, declined to comment when asked whether Reliance Mutual Fund had any strategic intention behind the deal or it was just another investment.
For Fidelity, this is part of a broader selling plan for its Indian venture. After the recent exit of Fidelity's high-profile Indian fund manager, Arun Mehra, new managers are understood to have started selling some existing investments.
The FT deal is one of the most high-profile deals done by Fidelity. This was something of a surprise for the market, as earlier in the day FT had said to the bourses that Fidelity, along with other foreign investors, continued to be shareholders in MCX.
