National Multi-Commodity Exchange (NMCE) is looking for a foreign partner. The exchange, in which Reliance Money picked up a 26% stake recently, is ready to concede a minimum 5% stake to a foreign partner.
The stake sale will unlock more value for the exchange and boost its knowledge capital, Sudip Bandopadhyay, a member of the board of governors of NMCE, told FE. Bandopadhyay is also the director and chief executive officer of Reliance Money.
Ahmedabad-based NMCE has an average daily turnover of up to Rs 200 crore. But this is way below the turnover of bigger rivals Multi-Commodity Exchange?s (MCX) Rs 10,000 crore and National Commodity and Derivatives Exchange?s (NCDEX) of Rs 2,000 crore. NMCE, ironically, was the first nationally recognised commex.
NMCE?s stakeholders, other than Reliance Money, include the Central Warehousing Corporation and the Bombay Stock Exchange with 26% each, Gujarat Agro Industries with 7%, Nafed with 5% and Punjab National Bank (PNB) with 10%. In the event of a stake sale, PNB or Nafed could offload its holding.
Exchanges across the world are buying into each other to shore up their presence in an increasingly globalised trading platform conducted over wires.
?We are also open to strategic tie-ups for knowledge and expertise sharing on the lines of MCX?s arrangement with Tokyo Commodities Exchange, Bursa Malaysia Derivatives and so on,? Bandopadhyay said. NMCE, he said,post-stake sale plans to venture into warehouse receipt financing, and is working towards facilitating or creating a spot exchange in some manner. MCX and NCDEX already have foreign exchanges and institutional buyers as stakeholders. In February, NYSE Euronext bought a 5% stake in MCX for around Rs 220 crore. Prior to that Fidelity had picked up a 9% stake in the exchange. Similarly, Goldman Sachs and Intercontinental Exchange Inc of the US had bought 7% and 8% stake, respectively, in NCDEX.
But as the government regulations allows foreign exchanges or institutional buyers to hold only 5% stake in an Indian exchange, sources said, after the government law on foreign holding in Indian commodity exchanges comes into force all these entities have to cut down their stakes to 5%.
NMCE plans to venture into the spot markets besides revamping and relaunching some of its existing 44 contracts to enhance trading volumes and trader participation. ?We are soon planning to hold discussions with leading industry associations in agriculture to work out a tie-up for our foray into spot exchanges,? Bandopadhyay added. MCX recently started the National Spot Exchange Ltd while NCDEX already had a spot-trading platform.