Extending the previous session’s steep fall, shares of Financial Technologies India and Multi Commodity Exchange of India plummeted by as much as 45 per cent today amid problems at group entity National Spot Exchange Ltd (NSEL).

Making a weak opening, shares of FTIL further tanked 45 per cent to Rs 105.5 — its fresh 52-week low on the BSE. In the previous trade, the stock had fallen by as much as 65 per cent.

FTIL-promoted MCX shares were locked in lower circuit as they shed 20 per cent.

Over the past two days, the market value of FTIL has eroded by Rs 1,799 crore to Rs 696 crore, while MCX has seen a slump of Rs 1,174 crore to Rs 2,089 crore in its m-cap.

A major crisis erupted at National Spot Exchange Ltd yesterday after it suspended most trades on its platform, prompting the Government to order an enquiry by the Forward Markets Commission, while the Securities and Exchange Board of India also began a separate probe amid a crash in the shares of two listed group companies.

The Government said that it is seriously looking into the matter and has sought a report from FMC within a day. The Consumer Affairs Ministry, Finance Ministry and SEBI are keeping a close watch on the situation, Food and Consumer Affairs Minister K.V. Thomas had said yesterday.

National Spot Exchange Ltd (NSEL), which provides an electronic platform to farmers and traders for spot trading in farm products and bullion, among others, said that it would meet all obligations towards brokers and clients who have traded on its platform. Speculations, however, were rife about a potential default on payouts running into Rs 5,000-6,000 crore.

It has blamed “loss of trading interest” and “abrupt structural changes in marketplace” for the suspension of trade. However, there have been speculations that NSEL did not have adequate stock of commodities to make the delivery.

NSEL has said that it is deferring the settlement for all pending contracts for 15 days, raising concerns about potential defaults and liquidity problems at brokers and clients level.

(This article was published on August 2, 2013)
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