State-owned MMTC Ltd on Tuesday announced that it plans to set up a commodity exchange in partnership with Indiabulls Financial Services Ltd. The ministry of commerce & industry has already approved the proposal.
As reported exclusively by FE on Tuesday, a special purpose vehicle (SPV) will be formed for the purpose, in which MMTC will hold 26% stake and Indiabulls will hold the remaining 74%. The equity capital of the SPV will be Rs 100 crore and shareholders MMTC and Indiabulls will invest their share of equity capital on a pro-rata basis, the company informed the BSE.
This would be the country?s fourth commodity exchange at the national level, after the Multi-Commodity Exchange of India, National Commodity & Derivatives Exchange and National Multi-Commodity Exchange of India.
Gagan Banga, executive director, Indiabulls, told FE, ?The objective of this joint venture is to set up a meaningful commodity exchange, with a greater focus on agri-commodities. We would like to leverage the warehousing capabilities of MMTC.?
MMTC stock was locked in the 5% upper circuit on the BSE and it closed at Rs 30,192.25 with only eight shares traded, while Indiabulls stock was up Rs 50.50, or 9.25%, at Rs 596.25. MMTC is the country?s largest international trading house with an annual trading turnover of $4 billion, while Indiabulls is a leading financial services conglomerate with $4 billion in market cap.
Representatives of the two organisations have been in dialogue with the FMC, the regulatory authority for the country?s commodity exchanges, and MMTC submitted an application for its proposed exchange to the commission for approval on Wednesday.