The Ahmedabad-based National Multi Commodity Exchange (NMCE) is in talks with Singapore Commodity Exchange (SICOM) and Norwegian power exchange, Nordpool, to dilute further stake. Reliance Money had recently signed an agreement to buy 26 per cent stake in the exchange.
NMCE is looking to issue fresh equity up to the extent of 5 per cent each to both the exchanges if the talks are successful, said an NMCE board member. An a NMCE representatives was in Singapore to meet SICOM officials.
The Anil Dhirubhai Ambani Group (ADAG)-promoted Reliance Money has valued the exchange at Rs 100 crore. NMCE would be issuing fresh equity up to 26 per cent to Reliance Money too.
However, Reliance Money is yet to pay the amount to NMCE as the approval on the deal from the commodity markets regulator, Forward Markets Commission (FMC), is awaited.
SICOM is promoted internationally and Singapore Stock Exchange (SGX), Tong Teik and Regional Rubber Trading are represented on its board. The primary focus of the exchange is trading in rubber futures and picking up a stake in NMCE is a strategic fit for SICOM because NMCE is already strong in that area.
The other exchange, which is being talked about is Nordpool, established in 1993.
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The two national grid companies, Statnett SF in Norway (50 per cent) and Affärsverket Svenska Kraftnät in Sweden (50 per cent) own the exchange. Picking up a stake in NMCE will enable Nordpool to make an entry into the Indian market, while it will enable NMCE to enter the power exchange business at a later point.
The Bombay Stock Exchange (BSE) has recently called off its plan to acquire 26 per cent stake in NMCE and the deal was terminated just before the resignation of BSE Managing Director and CEO Rajnikant Patel.
Currently, the shareholders of NMCE include Central Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of India (NAFED), Gujarat Agro-Industries Corporation (GAICL), Gujarat State Agricultural Marketing Board (GSAMB), National Institute of Agricultural Marketing (NIAM), and Neptune Overseas (NOL) along with Reliance Money (once it gets FMC approval).
Indian law permits foreign exchanges or institutional buyers to hold only a 5 per cent stake in any Indian exchange. Earlier, the country’s two largest commodity exchanges, the MCX and the NCDEX, sold stakes to foreign exchanges and institutional buyers.
In February, NYSE Euronext bought a 5 per cent stake in MCX for around Rs 220 crore. Earlier, Fidelity had picked up 9 per cent stake in the exchange.
Similarly, Goldman Sachs and the US-based Intercontinental Exchange had bought 7 per cent and 8 per cent stake respectively in the NCDEX.