Kochi/ Ahmedabad: The Bombay Stock Exchange (BSE) is set to pick up a 26% stake in Ahmedabad-based National Multi-Commodity Exchange of India Ltd, or NMCE.
Kailash Gupta, managing director of NMCE, said a formal agreement would be signed with BSE on Monday.
He, however, declined to reveal the deal value.
A senior NMCE official, who does not wish to be identified, said BSE might eventually take control of the management and shift the commodity exchange to Mumbai.
BSE had initially approached the commodity market regulator, the Forward Markets Commission (FMC), in early 2007 regarding a stake acquisition in NMCE.
However, after Goldman Sachs Group Inc. and Fidelity International bought stakes in the other two major commodity exchanges in the country—the Multi Commodity Exchange of India Ltd (MCX) and the National Commodity and Derivatives Exchange Ltd (NCDEX)—FMC had asked all agri-commodity exchanges to not change their shareholding patterns until fresh guidelines were issued.
Early this month, NYSE Euronext, which owns the New York Stock Exchange, picked a 5% stake in MCX.
Central Warehousing Corp., Neptune Overseas Ltd and Punjab National Bank are the three major shareholders of NMCE, holding 26%, 25% and 10%, respectively.
Gujarat Agro Industries Corp. Ltd holds a 7% stake in the NMCE, while the National Agricultural Cooperative Marketing Federation of India, or Nafed, the apex organization of various farmers’ cooperatives in the country, has a 5% stake.
NMCE started futures trading in 24 commodities in November 2002 on a national scale and its basket of commodities has grown substantially since then to include cash crops, food grains, plantations, spices, oil seeds, metals and bullion, among others.
However, its market share is the smallest among the three national commodity exchanges with MCX holding the maximum, followed by NCDEX, which roughly accounts for one-third of MCX’s market share.
NMCE will now be the second commodity exchange in the country with a stock exchange as promoter.
The National Stock Exchange has a 15% interest in NCDEX.
In January, the Union government allowed a total of 49% foreign direct investment in a commodity exchange.