I have similar kind of thought process for MCX and hence it forms around 20% of my portfolio bought at around 500. The way the recent few months have progressed, I am getting more confident that a strong long term anchor investor (Kotak, Tata Cap, CME etc.) will start managing this exchange eventually and Jignesh will have to give in. That’s positive for long term.
On thing that worries me a bit is the likelihood of Ranbaxy kind of events unfolding down the line. Some hidden inter-party transactions between FT and MCX, some contingent liabilities (not showing up in the current balance sheet), penalty associated with breaking the long term (I guess around 33 years) technology contract of FT with MCX etc. might come up in the future and may spoil the party.
Here are the probabilities that I have mentally come up with the likely scenarios that might unfold:
- A strong and reputed anchor investor (with 24% stake) comes on board, no hidden surprises and slowly the operating business improves (volume increase, more participants, more revenue avenues open up etc) : 6****0%
- A strong and reputed anchor investor (with 24% stake) comes on board, some hidden surprises crop up : **20% **(I wish this does not happen given MCX is regulated by FMC. But, NSEL was a day light robbery and anything can happen. Fingers crossed!)
- Multiple parties buys FTs 24% stake and the exchange is run like a PSU : 10% (the latter looks less likely given the way NSE is managed and run today)
- FT does not give in and the things get into legal tussle : **10% **(assigning it 10% owing to the political clout JS might have)
I feel with the above mental construct, I am taking chances were chances of winning are higher. Would love to her your thoughts?