Several leading commodity-derivative exchanges in Asia, the US and the UK have initiated talks with the National Multi Commodity Exchange (NMCE) to purchase a 5% stake in the Indian bourse.
The talks have acquired added impetus after the Bombay Stock Exchange (BSE) withdrew its 26%-stake in the NMCE, making space for the addition of an exchange, to the NMCE board. Last week, The Financial Express reported that the NMCE was eyeing various foreign investors and bourses who would buy its 5%-stake in the exchange.
“After the exit of the BSE, the two big stake-holders are Reliance Money and the Central Warehousing Corporation (CWC) with a 26%-stake each. While there are no exchanges on the board, it is logical that foreign commodity bourses are looking at the stake in the NMCE as a value proposition,? Sudip Bandopadhyay, director and CEO, Reliance Money, told FE.
Bandopadhyay was recently inducted onto the board of governors of the NMCE, after the purchase of the stake by the NMCE. Reliance Money bought its 26%-stake in the NMCE for an amount ranging from Rs 40 crore to Rs 100 crore. Sources said that the NMCE could key in on a foreign investorn in the next one month.
Earlier, the country’s two largest commodity exchanges, the MCX and the NCDEX sold stakes to foreign exchanges and institutional buyers. Indian law permits foreign exchanges or institutional buyers to hold only a 5% stake in any Indian exchange.
In February, NYSE Euronext bought a 5%-stake in MCX for around Rs 220 crore, earlier Fidelity had picked up 9% stake in the exchange. Similarly, Goldman Sachs and the US-based Intercontinental Exchange Inc had bought 7% and 8% stake respectively in the NCDEX.
Recently, the NMCE launched a spot exchange for agricultural produce, the National Agriculture Produce Marketing Committee, in association with Reliance Money. The Gujarat Niyantrit Bazar Sangh, an apex body of more than 200 mandis in Gujarat is a co-promoter of National APMC. The exchange also plans to venture into warehouse receipt financing.