NSEL crisis hits Financial Technologies Q2 net

FTIL posts a more than 61% drop in stand-alone net profit to Rs.27.01 crore in the second quarter 

New Delhi: Jignesh Shah-led Financial Technologies (India) Ltd on Saturday posted an over 61% drop in stand-alone net profit to Rs.27.01 crore in the second quarter after making a provision for its investment in embattled subsidiary National Spot Exchange Ltd (NSEL).

FTIL had reported a profit of Rs.69.55 crore a year earlier, it said in a regulatory filing.

FTIL said that following developments at NSEL, it made a provision towards “dimunition other than temporary in value of long term investment of Rs.44.99 crore for its investment in NSEL”.

The group was plunged into a crisis in August after the government asked NSEL to halt trading in some contracts due to violation of norms. The exchange is grappling with the settlement of Rs.5,600 crore of dues.

“Profit has come down mainly because of the value of long-term investment made by FTIL in NSEL has come down after the payment crisis,” an analyst said. Income from operations fell to Rs.92.61 crore in the quarter ended 30 September from Rs.124.98 crore as revenue from its software business declined. Expenses rose to Rs.68.16 crore from Rs.55.28 crore a year earlier.

FTIL, the holding company for the Shah-led group, also operates a network of exchanges globally. In India, it has set up the Multi Commodity Exchange of India Ltd, the MCX Stock Exchange Ltd and NSEL. The company said it gave NSEL a one-time bridge loan of Rs.179.4 crore to pay dues to small investors.

The company declared a second interim dividend of Rs.2 per share, payment of which will be made on 20 December.

Source-PTI

Shah Mohammad Abdul Qadir
PGDM 1st Semester
IIMT College Of Management
Greater Noida, UP