| Mumbai: The Bombay Stock Exchange plans to pick up 26% stake in Ahmedabad-based National Multi-Commodity Exchange of India Ltd (NMCE), and an announcement of the formalisation of the tie-up is expected on Monday.
In June 2007, the BSE had approached the Forward Markets Commission (FMC), the commodities market watchdog, for buying 26% stake in NMCE. The valuation for the stake sale to BSE is not known, but the new capital infusion with a premium is expected to be around Rs 100 crore.
A senior BSE official, who did not wish to be identified, declined to comment on the value of the deal because of a confidentiality clause. BSE might eventually take control of the management of the demutualised online commodity exchange, the official said.
The tie-up would help NMCE increase its trade volumes in agricultural and other commodities as it would then have access to the large BSE trading platform network besides its expertise in running a large bourse. The BSE would become the second stock exchange, after the NSE, which has a 15% interest in NCDEX, to hold a stake in a commodity exchange.
At present, the Central Warehousing Corporation holds 26% stake in NMCE, while Nafed and the Punjab National Bank, hold around 10% each. Gujarat Agro Industries has a 5% stake.
NMCE commenced futures trading in 24 commodities in 2002 on a national scale and the basket has grown substantially since then to include cash crops, food grains, plantations, spices, oil seeds, metals and bullion among others.
Given the increased participation in commodity trading, the segment is expected to touch a volume of Rs 74,15,613 crore by FY '10, growing at a steady rate of about 30%.
According to a recent Assocham-e-Valueserve study, the commodity trading segment has expanded almost 50 times in just five years - to Rs 33,75,336 crore in 2007 from Rs 66,530 crore in 2002. |