The National Stock Exchange (NSE) has again approached the Consumer Affairs Ministry to seek extension of three months to dilute its stake in the commodity bourse NCDEX to five per cent.
The deadline for dilution of the stake is expiring on Thursday. NSE had got three-months extension from the ministry in April.
At present, NSE has 11.1 per cent stake in NCDEX. Under the new guidelines for commodity bourses, which have completed a five-year term, a stock exchange cannot hold more than five per cent stake in a commodity bourse.
“NSE has sought further extension of three months for stake dilution in NCDEX and we are considering it,” a senior consumer ministry official said.
NSE has contended it is in advance stage of talks with a domestic company and a Qatar-based firm for dilution of stake in NCDEX, the official said, adding the exchange has sought extension as it would take more time to get regulatory approvals required for completion of the deal.
The stock exchange plans to sell five per cent stake to overseas firm and the rest 1.1 per cent to the domestic entity, the official said.
More From This Section
The Consumer Affairs Ministry frames policy for the commodity futures market and the regulator Forward Markets Commission (FMC) oversees the functioning of the 23 commodity exchanges in the country. Earlier this year, NCDEX had roped in Jaypee Capital Services and Shree Renuka Sugars to enhance their networth to Rs 50 crore as required by the new norms.
Jaypee Capital holds 22.38 per cent stake in NCDEX, while Shree Renuka Sugars has 12.50 per cent stake in the country’s second-largest commodity bourse. LIC, IFFCO and Nabard are among other major shareholders in the exchange. Sources said NSE has already signed the term sheet to sell 6.1 per cent of stake in NCDEX to meet the revised FMC guidelines and has sought extension of three months to complete the formalities.
The deal for share sale would need approvals from the government’s FDI clearance body Foreign Investment Promotion Board, Reserve Bank of India and FMC.