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Suresh P. Iyengar

Mumbai, July 21 IndiaBulls Financial Services (IBFS) and MMTC commodity exchange venture is expected to go live in six months.

The joint venture received Consumer Affairs Ministry’s in-principle approval last week and is in the process of meeting the new norms set by the market regulator Forward Markets Commission (FMC).

Mr Gagan Banga, CEO, IndiaBulls Financial Services, said: “We are in talks with some of the investors to dilute our stake and comply with all the norms within a month’s time. The exchange will go live in six months.”

The proposed exchange will focus on agriculture commodities, besides metals and energy, Mr Banga said.

IBFS has proposed to hold 74 per cent stake, while MMTC will have 26 per cent in the special purpose vehicle (SPV) to be formed with a equity capital of Rs 100 crore for the venture.

According to the FMC guidelines, no single shareholder either individually or together with persons acting in concert with will be allowed to hold more than 40 per cent of the paid up equity capital in the proposed exchange.

No individual shall hold more than one per cent of the paid up equity capital and the total of such individual holdings shall not exceed 25 per cent of the paid up capital, it said.

Mr B.C. Khatua, Chairman, FMC, said: “We want equity holdings in exchanges spread among various market participants such as growers, processors, end users and international investors so that they can all chip in their expertise.”

On Kotak Mahindra Bank’s proposal to acquire 51 per cent stake in the 50-year-old Ahmedabad Commodity Exchange, Mr Khatua said FMC was in the process of setting up guideline for such investments. Moreover, the regional exchanges have to complete the process of demutualization before attracting equity investors.

More Stories on : Commodity Exchanges

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IndiaBulls’ commodity bourse plans to go live in 6 months

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