Financial Tech slashes stake in rival NSE

The identity of the buyer is not known, as the company has not disclosed this information in its communication to both the BSE and the NSE.

After the sale by the firm, which is promoted by Jignesh Shah, who is also the promoter of MCX, a commodity bourse, its stake in NSE has come down to 10,000 shares.

In August 2007, Financial Technologies bought 4,50,000 NSE shares, or about one per cent of the stock exchange, from ICICI Bank for Rs 125 crore. The company has now made a profit of Rs 42.2 crore from the sale at Rs 3,800 per share.

When four investors – the New York Stock Exchange, Goldman Sachs, General Atlantic and SAIF Partners – bought five per cent each in January 2007, they had paid around Rs 2,250-2500 per share. A few months later, NYSE sold its stake to Temasek Holdings of Singapore.

Financial Technologies refused to comment on any aspect of sale and its spokesperson directed all calls to the group CFO, who did not take calls from this paper. An NSE spokesperson said they do not comment on transactions between individual shareholders.

Experts say that Financial Technologies may have kept this minor stake for the strategic purpose of getting information, which every shareholder has the right to even if the company is not listed.

Both NSE and Financial Technologies held stakes in each other. NSE has 20 lakh shares of MCX, according to its financial statement for 2009-10.

It is to be seen whether NSE will exit or reduce its holding in MCX-SX, which was denied permission by the Securities and Exchange Board of India from entering the stock exchange business due to various violations, including higher promoter holding. MCX-SX has been accusing the capital market regulator of favouring NSE.

Both the companies compete with each other in exchange-related software development business and currency futures trade through their stock exchange platforms. Financial Technologies shares closed 1.61 per cent up at Rs 1,118.25 on the BSE on Thursday.