Citigroup is planning to sell its 5 per cent stake in India’s largest commodities exchange group for about $40m to Ashmore, the emerging markets specialised asset manager, people close to the matter said.
The move to leave the Multi Commodity Exchange of India comes at a 10 per cent loss for the US bank that acquired its stake two years ago during a period of boom at $50m from Financial Technologies India, which controls the exchange.
Vikram Pandit, chief executive of Citi, on Wednesday said in an interview with the Financial Times that US bank was committed to expand its footprint in India, both in the retail and lending sectors.
MCX, Citigroup and Ashmore declined to comment on the deal.
MCX, which in a few years has risen to control three-quarters of the total turnover of India’s 24 commodities exchanges, has in recent years attracted a lot of attention from foreign investors.
Merrill Lynch and Fidelity respectively have a 5 and 9.21 per cent stake in MCX. However, Fidelity has been looking to divest part of its stake due to stringent government regulation over foreign direct invest. Foreign investors are not allowed to control more than 5 per cent in a local exchange.
Source: FT