Mumbai: Indian billionaire Anil Ambani plans to get shares in a local commodities exchange, signalling growing corporate interest in bourses where Goldman Sachs and IntercontinentalExchange have bought small stakes.
Reliance Anil Dhirubhai Ambani Group (R-ADAG) plans to buy a stake in the Indian Commodity Exchange (ICEX), a leading bourse for metals including gold, the market regulator, whose approval is needed for selling stakes in bourses, said on Wednesday.
Jaypee Capital wants to acquire 26% in the National Commodity and Derivatives Exchange (NCDEX), the regulator added.
R-ADAG’s Reliance Money, a unit of Reliance Capital, will buy the stake from Indiabulls Financial Services Ltd, which owns 40% of ICEX, two sources at Indiabulls said.
ICEX was founded last year by state-run metals and farm commodities trader MMTC Ltd.
BC Khatua, chairman of the Forward Markets Commission that regulates commodities exchanges, confirmed there was a proposal to sell equity to Reliance Money but he did not say how big of a stake it would be.
The Business Standard paper had reported Ambani wanted 26% of ICEX.
“Yes Indiabulls has approached us... They want to surrender their anchor-investor status to Reliance Money,” Khatua said.
He also said the regulator was considering a proposal from Jaypee Capital Services to acquire 26% anchor investor stake in NCDEX.
Analysts said the entry of large business groups such as R-ADAG would help boost turnover on exchanges.
“Investors are expecting valuations to go up if there are reforms in this sector. The entry of players like Reliance will drive up trading volumes,” said Gnanasekar Thiagarajan, director at Commtrendz Research.
India has four national commodity bourses — National Commodity and Derivatives Exchange (NCDEX), Multi-Commodity Exchange (MCX), National Multi-Commodity Exchange, and ICEX.
A fifth bourse — ACE Derivatives and Commodity Exchange, promoted by Kotak Mahindra Bank — won national commodity exchange status last week and starts up in a month.
India, which allowed futures trading in commodities in 2003, has one of the fastest-growing commodity futures markets and had a combined turnover of Rs77.65 trillion ($1,667 billion) in the 2009/10 fiscal year ending in March.
Growing turnover has attracted several investors such as Goldman Sachs, which bought a 4 percent stake in NCDEX through a Mauritius-based investment arm. InterContinentalExchange also holds a 4% stake in the same exchange.
NYSE Euronext, Fidelity International, Aginyx Enterprises, Intel Capital, and Passport India Investments own stakes in rival MCX, India’s biggest commodities exchange.
Foreign investors are allowed to hold up to 5% equity stakes in local commodities exchanges.