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Fidelity offloads 2% stake in MCX to Passport India

Leading foreign institutional investor Fidelity International is said to have sold around 2% stake in MCX to Passport India, an existing shareholder in the commodity bourse, according to market sources. The sale is in keeping with government norms that restrict a single foreign investor’s shareholding in a commodity bourse to 5% by March 31, 2010.

With this, Fidelity’s stake will come down to 7% while Passport India’s shareholding in MCX will rise to 5%. No confirmation was available on the pricing of the transaction. Fidelity had picked up around 9% in MCX in 2006 for $49 million, valuing the exchange at around $540 million. When NYSE picked up a 5% stake in MCX in 2008, the exchange was valued at $1.1 billion.

When contacted, officials from MCX and Fidelity declined to confirm the development. A Fidelity spokesperson said, “We don’t comment on Fidelity’s holdings.” An MCX spokesperson said, “We don’t comment on third-party information, processes or action and we also don’t do selective disclosure nor comment on speculation/rumours and hence, we won’t like to comment.”

Commodity futures market regulator Forward Markets Commission (FMC) director Anupam Mishra confirmed that Fidelity had sought its (FMC’s) approval to pare its stake in MCX, though he added, “I am not sure about how much they are seeking to sell.” ET had reported in its edition dated January 28 that Fidelity had sought FMC’s nod for reducing its 9% stake that it holds in MCX through its affiliate Fid Fund (Mauritius).

MCX has been promoted by Financial Technologies, which holds 31% in the bourse. Other shareholders as on March 31, 2009, include NYSE Euronext (5%), Citi (5%), Merrill Lynch (5%), Passport India (3%), IL&FS (5%), Corporation Bank (4%), SBI & its associate banks (9%), ICICI Group (3%), Nabard (3%), and other banks and financial institutions (18%).

Source: Economic Times

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