MCX promoter Financial Technologies eyes stake in OTCEI, ISE

Financial Technologies, the promoter of the Multi Commodity Exchange of India (MCX), has shown interest in acquiring stakes in the Over the Counter Exchange of India (OTCEI) and the Inter-connected Stock Exchange (ISE). The company had recently applied to the Securities and Exchange Board of India (SEBI) expressing interest in floating a separate stock exchange for small and medium enterprises (SMEs). The company’s move to acquire a stake is seen as a step towards setting up an SME bourse. The OTCEI had placed Financial Technologies’ proposal to buy stake before its promoters and was awaiting their response. The ISE is expected to complete its valuation shortly, with the September 14 deadline for the completion of demutualization process approaching. Apart from Financial Technologies, a few other IT companies and private equity firms are learnt to have approached the exchange to acquire stake. The OTCEI is promoted by financial institutions such as UTI, ICICI, IDBI and LIC, while the ISE is promoted by 13 regional stock exchanges of Bangalore, Kochi, Jaipur, Bhubaneshwar and Mangalore, among others.

Read the Business Standard article.

OTCEI likely to get equity infusion from foreign bourses

Following the interests shown in the NSE and the BSE by foreign investors, there is news that foreign stock exchanges are now eyeing equity stake in the Over the Counter Exchange of India (OTCEI). The government wants to position the OTCEI on the lines of London’s Alternative Investment Market (AIM) by allowing easier corporate governance norms for the exchange, and is now planning to throw a lifeline to the now defunct bourse for small and medium companies.

Accordingly, the government is likely to encourage foreign stock exchanges to buy a strategic stake in the bourse. Recently, officials from the China Shanghai Stock Exchange visited the OTCEI and it is learnt that the Chinese may be willing to buy 5% in the exchange as permitted under current guidelines. It is also learnt that London’s AIM and the South Korean Stock Exchange may be willing to buy stakes in the exchange. In addition to relaxing the listing norms on the OTCEI, the government is also likely to increase the eligibility criteria for companies coming out with IPOs.

The OTCEI was incorporated in early 1991, even before the establishment of the NSE in 1994. The forthcoming Budget is likely to name its exclusivity for listing by small and medium enterprises. The Securities and Exchange Board of India (SEBI) has also appointed a sub-committee to study the revival of the OTCEI.

Read more on this in the Business Standard article.