The National Multi-Commodity Exchange (NMCE), India's third-largest commodity bourse, will set a 30-day deadline for the Bombay Stock Exchange (BSE) to comply with the stake acquisition norms and make payments as per the mutually-agreed guidelines.
The decision to convey the deadline to BSE was taken at NMCE's board meeting on Tuesday. However, the commodity exchange's board has agreed to allow a short period of extension if BSE shows adequate interest.
BSE, India's largest stock exchange, had about a year ago announced to acquire 26 per cent stake in NMCE. Legal and other hurdles were cleared about seven months back, but BSE is yet to pay the acquisition amount to NMCE.
This non-payment is allegedly hurting the growth of the commodity exchange.
"We cannot wait indefinitely in the current competitive market, especially when we know that the fourth national commodity bourse is emerging very soon. We cleared everything within three days from the date of announcement, but it is BSE which is not taking the deal seriously. Therefore, we ought to look for an alternative partner, who can pump money into the commodity exchange and take it to the next growth level," said Kailash Gupta, Managing Director, NMCE.
"BSE has its own priorities and its board members are not taking the deal seriously. If they are really keen, we will fairly prioritise them," he added. In 2005, NMCE initiated talks with Reliance Money for up to 26 per cent stake sale. But then the price was not acceptable to the latter. However, when Reliance Money showed renewed interest at the price that was acceptable to BSE, NMCE decided to go ahead with the sale.
Reliance Money has proposed to acquire 26 per cent stake of NMCE in two phases. In the first phase the company will buy 10 per cent and the rest in the second phase.
Reliance Money, however, has no problem if BSE goes ahead with the deal. "BSE's engagement in the bourse will certainly help formulate professional strategies for the betterment of the exchange," said Sudip Bandyopadhyay, CEO, Reliance Money.
Reliance Money's proposal has not yet been forwarded to the FMC for approval. "Currently, we're working out to overcome legal hurdles, which may take a few more weeks. After that we will move Forward Markets Commission for approval," said the NMCE managing director.
