NSEL fiasco: Financial Technologies cracks 35%; down over 60% so far in August

NEW DELHI: Financial Technologies (India) Ltd cracked as much as 34.8 per cent in morning trade on Wednesday, after market intermediaries and a few investors claimed that the collateral for some of the commodity stock from its subsidiary National Spot Exchange Ltd (NSEL) was missing.


At a press conference held on Tuesday, the market intermediaries and a few investors claimed that commodity stocks, against which crores of rupees were lent through the exchange platform, was missing in certain warehouses.

Reacting to the news, Financial Technologies cracked nearly 35 per cent to touch its intraday low of Rs 110.50. The stock was trading 20 per cent lower at Rs 136.40 at 09:40 a.m.

The stock has plunged as much as 68 per cent so far in the month of August, as per data collected on August 13.

Shares in Multi Commodity Exchange of India, another FT-promoted entity, were locked in lower circuit on the Bombay Stock Exchange. The stock slipped 5 per cent and was at Rs 253.30 which was also its fresh 52-week low.

“To calm investor nerves, NSEL in a statement said that they have collected Rs 450 cr through RTGS & post dated cheques will be issued,” ET Now reported.

As per the media reports, the settlement is likely to resume on Aug 16, as per the schedule which will be given to Forward Markets Commission (FMC) later on Wednesday.

“Clearer position on stocks in warehouse to emerge after audit and the management of NSEL is making all attempts to ensure smooth settlement is done,” added the ET Now report.

The conference which was held on Tuesday, a day before Shah is to provide a plan to repay Rs 5,500 crore to 13,000 investors.

“On Tuesday, panic gripped market participants as word spread that only Rs 50 crore was lying in the escrow account that the exchange has opened to deposit dues recovered from borrowers,” ET reported.

"NSEL Brokers are up against the exchange and asking the government to take reins of the exchange. It is about time, the Government steps in to take charge of the affairs at the National Spot Exchange," HDFC Securities said in a note.

"Four Broker associations and leading brokers, who have at some point of time dealt with the NSEL were up in arms on Tuesday evening, demanding the Government takeover of not only NSEL but also the other entities of Mr Jignesh Shah – Financial Technologies and MCX," it added.