The Bombay Stock Exchange (BSE) move to buy a 26% stake in the Ahmedabad-headquartered National Multi Commodity Exchange (NMCE) is likely to take some more time to materialise as the BSE board has decided to seek more clarification from the NMCE management and its advisor. BSE is now going to initiate discussions with NMCE on some aspects of the deal.
BSE had announced the decision to acquire the stake last February.
According to sources close to the development, BSE is yet to sign the shareholders? agreement with its counterparts of the exchange.
Also, the BSE board would like to clarify certain points of the agreement with the NMCE managing director Kailash Gupta and Pradip Shah, chairman, IndAsia Advisors, the venture capital firm which acted as an advisor to NMCE in the deal. Till the clarity emerges on the issue, the disbursal of funds from the BSE will not be made, the sources clarified.
Jagdish Capoor, chairman, BSE, could not be reached for comment, while BSE officials too were unavailable for their response on the issue.
However, Kailash Gupta, MD, NMCE, confirmed BSE was yet to ink the shareholders? agreement.
It may be mentioned here that BSE and NMCE entered into a memorandum of understanding (MoU), where BSE agreed to buy 26% stake in NMCE on February 25, 2008.
It is understood that BSE agreed to pay Rs 65 for a NMCE share for the 26% stake and the total outgo from BSE was pegged at Rs 40 crore, which is yet to be disbursed.
Gupta also said, ?NMCE is yet to receive the payment from BSE against the 26% stake bought by it in the exchange.?
Another interesting development that has come to light is that Rajnikant Patel, MD & CEO, BSE, has joined the NMCE board not as a BSE representative but as a professional director. NMCE MD Gupta too confirmed this and said, ?Patel has joined the board not as the BSE representative but as an independent director.?
The BSE stake buy assumes significance now as the deal was discussed in detail at a crucial BSE board meeting last Saturday. Besides, Reliance Money, the financial services distribution arm of Reliance Capital Ltd, part of the Anil Dhirubhai Ambani Group (ADAG), has also announced its intention of buying 26% in NMCE.
Sudeep Bandyopadhyay, director and CEO, Reliance Money, told FE, ?Irrespective of BSE buying stake in NMCE, we are going ahead with our plans to enter the commodity space in a big way.?