FTIL’s warrants sale hangs in balance

Will MCX Stock Exchange (SX) reregister cancelled warrants? Financial Technologies (FTIL) recently announced that it had sold the warrants that it held in the MCX SX to a group of investors led by investor Rakesh Jhunjhunwalla. However, in August, MCX SX had cancelled FTIL’s 56.25 crore warrants and transferred the non-refundable deposits against it to reserves. This boosted the exchanges’ net worth to Rs 160 crore and saved it from hassle as regulatory requirement says it has to maintain Rs 100 crore net worth at all the time.

A source close to Jhunjhunwalla group said it was a calculated risk they had taken. The belief is that new investors fit the bill on ‘fit and proper’ and all other criteria and the court will allow them to convert their warrants into equity. FTIL has requested MCX-SX to register the transfer of its warrants.