The Hindu Business Line : BSE to buy 26 pc stake in NMCE

Mr Rajnikant Patel (left), Managing Director and CEO, BSE, Mr B.C. Khatua, Chairman, Forward Markets Commission, and Mr Kailash Gupta, Managing Director, National Multi-Commodity Exchange of India, after signing an agreement with NMCE in Mumbai on Monday. —

Our Bureau

Mumbai, Feb. 25 The Bombay Stock Exchange Ltd has signed an agreement to buy a 26 per cent stake in Ahmedabad-based National Multi-Commodity Exchange of India (NMCE) for an undisclosed amount. Mr Kailash Gupta, Managing Director, NMCE, said “the BSE would infuse about Rs 100 crore, but it is not yet decided whether it will be part of stake acquisition. The valuations have not been arrived at.”

The major stakeholders in NMCE include Neptune Overseas Ltd (25 per cent), Central Warehousing Corporation (26 per cent), Gujarat Agro Industries (five per cent), while the National Agricultural Co-Operative Marketing Federation of India (Nafed) and the Punjab National Bank around 10 per cent each.

Without divulging details on the stake dilution due to legal binding, Mr Gupta said, “Institutions have been given the first preference to sell their stake, if that doesn’t suffice non-institutions would chip in.”

NMCE would be setting up a corporate office in Mumbai soon. The BSE has appointed one of its key executives, Mr S.S. Vyas, as Chief Operating Officer of NMCE. “The tie-up would reduce members cost on infrastructure, as the tie-up would provide a trading platform which would present multiple segments with a possibility of trading in multiple exchanges,” said Mr Gupta.

Mr Rajnikant Patel, BSE’s Managing Director, said, “BSE foray into the commodities market space will bring 133 years of expertise, technology and nation-wide reach.”

The turnover of NMCE from January 16 to 31 was Rs 1,332 crore, according to the FMC data.

In June 2007, the BSE had approached the commodity market regulator Forward Markets Commission for buying the stake in NMCE.

The BSE would be the second stock exchange, after the National Stock Exchange (NSE) which has a 15 per cent interest in NCDEX, to hold a stake in a commodity exchange.

NMCE began futures trading in 24 commodities in 2002 on a national scale. The commodity exchanges are attracting investments due to their immense growth potential. The segment is expected to touch a volume of Rs 74,15,613 crore by financial year 2010, growing at a steady rate of about 30 per cent.

Last week, NYSE Euronext picked up a five per cent stake in MCX (Multi-Commodity Exchange) for Rs 240 crore.

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