MCX rallies, hits 52-week high as Kotak Mahindra Bank agrees to buy stake

NEW DELHI: Multi Commodity Exchange ( MCX) surged as much as 13.8 per cent in trade on Monday to hit its fresh 52-week high of Rs 895, after the private sector lender Kotak Mahindra Bank agreed to buy a 15 per cent stake in the company for Rs 459 crore.

At 10:00 a.m.; MCX was trading 11.4 per cent higher at Rs 876.20. It hit a low of Rs 735 and a 52-week high of Rs 895 in trade today.

Financial Technologies was trading 6 per cent higher at Rs 285.30. The stock rallied nearly 8 per cent to hit its intraday high of Rs 288.10.

Kotak Mahindra Bank was trading 2.8 per cent higher at Rs 961.80. It hit a low of Rs 950.25 and a high of Rs 965 in trade today.

The statement said the bank had entered into a share purchase agreement for the deal that is subject to certain conditions and regulatory approvals.

"We have agreed to take a significant minority stake in MCX. We are excited by the potential presented by the financial infrastructure space in the country and believe that an investment in MCX, with its significant franchise, will create long-term value," executive vice-chairman and managing director Uday Kotak said in a statement.

ET was the first to report on August 26, 2013, that Kotak was keen to buy a stake in MCX.

Market sources said Kotak had to pay a slightly higher price than it originally wanted after Rakesh Jhunjhunwala recently bought MCX shares, setting a benchmark.

Kotak, whose own commex failed to take off, is betting on the passage of Forward Contract (Regulation) Act, or FCRA, which will allow options and index futures products that could raise volumes higher than stock exchanges.

Shares of software solutions provider FTIL had risen in recent days on expectations the Kotak Group would buy the promoter's stake but had fallen 3.6 per cent to Rs 267.35 on Friday at the BSE.

The Kotak Group has linkages with the commodities sector through its various ventures Kotak Bank through lending activity to the agriculture sector or through its having promoted commodity futures bourse ACE, in which it has 40 per cent, added the ET report.