The Hindu Business Line : NMCE hopes to rope in general insurance co as stakeholder

THE Ahmedabad-based National Multi-Commodity Exchange of India Ltd (NMCE) is hoping to rope in a general insurance company as an equity stakeholder. The exchange hopes to hit the market with its maiden public offering in 2007.

According to Mr Kailash Gupta, Managing Director of NMCE, a Delhi-based consultant is preparing a report that will be passed on to a merchant banker.

"At the moment, we have wide exposure if we consider the status of our various promoters. We have the State Government's participation. Moreover, we have a public sector bank, Central Warehousing Corporation and others. What we now need is a general insurance company," Mr Gupta told reporters.

He was in the city to announce NMCE's plans of opening an office in Kolkata and to revitalise the futures trading in jute bags.

Asked whether NMCE had started looking for a general insurance company, he clarified that the exchange would go out of its way to seek such participation in the company.

"If some general insurance company is interested in picking up an equity stake, then the proposal would be placed before the board of directors for its consideration," he said.

At present, NMCE's promoters are Punjab National Bank, National Agricultural Cooperative Marketing Federation, Gujarat Agro Industries Corporation Ltd, Gujarat State Agricultural Marketing Board, National Institute of Agricultural Marketing, Neptune Overseas Ltd and Central Warehousing Corporation.

NMCE has worked out a two-phase expansion plan including enhancement in operational efficiency and a greater presence in other cities.

Currently NMCE is registering a daily turnover of Rs 100 crore a day, but Mr Gupta hoped to increase it to Rs 500 crore a day by the end of the current financial year.

For that the exchange has decided to "revitalise" the futures trading four commodities within the next fortnight. These commodities are gram, castor seed, guar seed and chana.

"At present, we are operating in 65 commodities but 40 out of these need to be revitalised. Currently jute goods, pepper and rubber deliver highest amount of volumes at our exchange," he said.

Talking about the expansion plan, he said, the consultants were preparing the report and it would be ready within the next 10-15 days. If the report satisfies the need of NMCE then the exchange would go ahead with it.

"Subsequently, we would ask the consultants to prepare a report on the second phase of expansion. To fund this expansion programme we would consider an IPO. It might happen within the next 18 months," he said.

At present, NMCE has 93 members and 500 sub-brokers. Mr Gupta said that the number of sub-brokers would be increased to 500 by the end of December 2006.