Kotak plans majority stake in Ahmedabad comex

Kotak plans majority stake in Ahmedabad comex
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First Published: Sun, Sep 07 2008. 11 49 AM IST
Updated: Sun, Sep 07 2008. 11 49 AM IST
PTI
New Delhi: After Anil Ambani group and Indiabulls, financial services major Kotak group is set to become the third leading corporate house to enter commodity bourse arena with plans for a majority stake in Ahmedabad Commodity Exchange.
The regional stock exchange has sought clearance from the commodity market regulator Forward Markets Commission for selling a majority stake to the Kotak group, sources said.
“The Ahmedabad Commodity Exchange, which deals in castor seeds futures, has an average daily trading volume of about 5,000 tonnes,” exchange officials said.
However, Kotak group’s plans would depend to a large extent on the release of FMC guidelines for the regional exchanges.
“We are waiting for the guidelines from FMC and accordingly Kotak group will buy the stakes,” an exchange official said.
Though Kotak is seeking to buy 51% stake in the exchange, it is ready to go for a smaller equity if FMC fixes a lower cap on the promoter holding. In its guidelines for national-level exchanges, FMC recently fixed a maximum limit of 40% for stake to be held by a promoter.
The Ahmedabad Commodity Exchange has 212 members and the shares in the company will be distributed among them after the guidelines for regional exchanges come out, officials said.
Sources said Kotak has plans to convert the regional exchange to a national one after getting approval of the market regulator.
Kotak group officials could not be contacted.
Kotak group Chief Uday Kotak met senior officials in the Consumer Affairs Ministry in August last week.
Stake acquisition
While the officials in the ministry as well as the corporate group were tight-lipped about the meeting, there have been speculations in the past that Kotak is planning to enter commodity exchange business through acquisition of stake in an existing regional exchange.
The Kotak Mahindra group, with a net worth of over Rs5,824 crore, is one of the leading players in the financial services sector having presence in banking, life insurance, stock broking, mutual funds and investment banking.
In the recent past, two major corporate house, Anil Ambani group and Indiabulls group, have entered this business, which has grown to over Rs40,00,000 crore and is estimated to double in about less than two years.
In India, there are three national level exchanges MCX, NCDEX ans NMCE and 19 regional bourses.
MCX is promoted by Financial Technologies, while Reliance Money has become the anchor investor in NMCE. In NCDEX, there are a number of share holders with NSE playing the role of a leading investor.
Indiabulls will float its exchange in partnership with public sector company MMTC.
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First Published: Sun, Sep 07 2008. 11 49 AM IST