Financial Technologies, MCX shares tank as subsidiary NSEL suspends trading

Shares of Financial Technologies India and Multi Commodity Exchange of India on Thursday came under severe selling pressure, falling as much as 65 per cent, amid problems at group entity National Spot Exchange Ltd (NSEL).

While shares of FTIL plunged 64.59 per cent, FTIL-promoted MCX shares were locked in lower circuit as they shed 19.99 per cent on the BSE.

NSEL, a national level electronic commodity spot exchange, last night suspended trading in all contracts except "e-series" until further notice, triggering selling in shares of the two listed group companies.

The MCX stock has shed more than two thirds of its value since touching a 52-week peak price of Rs 1,617 on November 13, 2012 last year at the BSE.

Shares of FTIL nosedived 64.59 per cent to close the day at Rs 191.75. Intra-day, the scrip had tumbled 66.69 per cent to Rs 180.35 - its 52-week low. It has lost almost 90 per cent of its value since November 2012 peaks.

Following steep fall in both the stocks today, market capitalisation of FTIL and MCX saw massive erosion. The market value of FTIL slumped Rs 1,612 crore to Rs 883 crore, while that of MCX was down by Rs 652 crore to Rs 2,611 crore.

"The stock of Financial Technologies was seen down by over 60% amid concerns over NSEL suspending its contracts for trading," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio Ltd.

In a filing to the BSE, NSEL's promoter Financial Technologies India Ltd (FTIL) informed that its subsidiary "NSEL has suspend trading in all contracts, except e-series contracts, until further notice."

It has also decided to merge the delivery and settlement of all pending contracts and deferred the same for a period of 15 days. Consequently, the positions outstanding in the contracts will be settled by way of delivery and payment after expiry of 15 days, it added.

FTIL and MCX said there would be no adverse impact on their businesses after group company National Spot Exchange Ltd decided to temporarily halt trading on one-day forward contracts.

"NSEL has taken a decision to suspend the trading on one-day forward contracts, other than e-series, temporarily. In this context, FTIL states that this action of NSEL does not entail any financial liability on FTIL and that the business of FTIL is as usual," FTIL Chairman and Managing Director Jignesh Shah said in a filing to the BSE.

He expressed confidence that NSEL would resolve the situation within the contours of its bylaws and rules.

FTIL-promoted MCX, the country's largest commodity exchange, said in a statement to the BSE that NSEL's decision would not affect its operations and financials.