NMCE plans to raise Rs100 cr through new issue of shares

NMCE plans to raise Rs100 cr through new issue of shares
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First Published: Wed, Oct 08 2008. 09 59 PM IST

 Reliance Money Ltd CEO Sudip Bandyopadhyay. Amit Dave / Reuters
Reliance Money Ltd CEO Sudip Bandyopadhyay. Amit Dave / Reuters
Updated: Wed, Oct 08 2008. 09 59 PM IST
Mumbai: The National Multi Commodity Exchange of India Ltd (NMCE) plans to raise Rs100 crore through a new issue of shares to its existing shareholders including Reliance Money Ltd, a unit of the Anil Dhirubhai Ambani Group (R-Adag), said a top executive.
Reliance Money Ltd CEO Sudip Bandyopadhyay. Amit Dave / Reuters
The company, which will raise the money before the end of the year, said it proposes to spend this money to part fund expansion efforts which include floating new companies for managing warehouses and logistics and currency futures, said Kailash Gupta, managing director, NMCE.
Last week, Reliance Money Ltd picked up a 10% stake in NMCE, for which it paid Rs11 crore, according to Gupta.
Now, the company is looking to increase its stake to 26% for which it has sought approval from the ministry of consumer affairs, the apex body for matters relating to commodity futures trading in India.
“It (the increase in stake) should come through in three months,” said Sudip Bandyopadhyay, chief executive of Reliance Money and a director at NMCE. “We will use the money for funding the expansion plans of NMCE.”
NMCE, which is the oldest exchange to start commodity futures trading in the country, has lagged rivals such as Multi Commodity Exchange of India Ltd and National Commodity and Derivatives Exchange of India Ltd. NMCE has a 3% marketshare in the Rs18,454 crore worth of average daily trading in India’s commodity futures exchanges.
Apart from R-Adag, shareholders in the exchange include the Central Warehousing Corp. Ltd and the Punjab National Bank Ltd.
Gupta said that the exchange expects “marketshare to grow substantially”, because of the investment but declined to comment on details.
NMCE has sought permission to set up three new units—one for agricultural products marketing, another for warehousing and a third one for currency futures trading—for which it has sought approval from the capital markets regulator Securities and Exchange Board of India.
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First Published: Wed, Oct 08 2008. 09 59 PM IST