BackShree Renuka Sugars sells 7.5% stake in NCDEX
Shree Renuka Sugars to sell stake in NCDEX for Rs66.54 crore; NSEL buys 5% stake, say people familiar with the matter
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Mumbai: Shree Renuka Sugars Ltd on Friday said it had entered into agreements for selling a 7.5% stake in National Commodity and Derivatives Exchange Ltd (NCDEX) for ₹ 66.54 crore.
It did not, however, name the buyers of the 7.5% stake.
According to two people with knowledge of the matter, a 5% stake has been bought by National Stock Exchange of India Ltd. The remaining 2.5% been taken by a warehousing firm, said one of the persons mentioned above.
NSE declined to comment.
Following the closure of the transaction, the stake of Shree Renuka Sugars in NCDEX will go down from 12.5% to 5%.
In a filing to BSE, Shree Renuka Sugars said it has entered into agreements/term sheets “for sale of 38,02,300 equity shares of NCDEX, representing 7.5% of paid-up capital of NCDEX for a total sale consideration aggregating to ₹ 66.54 crore, subject to necessary approvals of NCDEX board and Forward Markets Commission (FMC)".
The decision to sell the stake follows the commodities market regulator FMC’s decision to change shareholding and ownership rules on Tuesday.
The new rules had set restrictions on the ownership of commodity exchanges, bringing the regulations in line with those that govern stock exchanges in the country.
The commodities market regulator said a commodity exchange, stock exchange, depository, bank, insurance company or a public financial institution can hold up to 15% of the paid-up capital in a commodity exchange.
However, no individual or any other kind of company can hold more than 5%.
In February, Singapore-based Wilmar International Ltd said it has agreed to buy a controlling stake in Shree Renuka resulting in a total cash infusion of $200 million, which will include purchasing shares from the public shareholders of the Indian company and subscribing to a proposed rights issue.
A person close to the development said National Stock Exchange (NSE) has bought a 5% stake in NCDEX from Shree Renuka while Indian Farmers Fertiliser Cooperative Ltd (IFFCO) bought 1.12% stake and Star Agriwarehousing and Collateral Management Ltd bought 1.38% stake.
Mint could not immediately contact IFFCO for a comment while Star Agriwarehousing and NSE declined to offer any comments. Shree Renuka also declined to comment.
The investment in NCDEX was a non-core holding for Shree Renuka and the sale would help it generate cash, said Deven Choksey, managing director and chief executive officer of KR Choksey Shares & Securities Pvt. Ltd. “For NSE, it is a good investment. This helps them increase their hold in the commodities space," added Choksey.
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