Ashmore has approached Foreign Investment Promotion Board in India to acquire 3.9 million shares from Citigroup Mauritius Strategic Holdings.
Citigroup paid INR1,050 a share for 1.95 million shares in MCX when the market was nearing the peak of a bull run in September 2007. Subsequently, the shares were split into two and Citi held 3.9 million shares.
Reportedly, Citigroup posted a $7.58bn loss for the fourth quarter of 2009. Against this backdrop, it has been divesting non-core assets globally to raise capital and reduce losses.
The move to leave the India-based commodity exchange comes at a 10% loss for the US-based lender which acquired the stake for $50m from Financial Technologies India two years ago during a period of boom.
According to the pre-IPO document, State Bank of India has 5.37%, Fidelity has 9.21% and Merrill Lynch (Mauritius) Holdings and IL&FS Trust have 5% stake in MCX. However, Fidelity has been waiting to divest part of its stake due to stringent government regulation over foreign direct investment. Foreign investors are barred to control more than 5% in a local exchange.
