National Commodity Exchange of India (NMCE), one of the oldest commodity exchanges in India, has raised Rs 25 crore from Bajaj Holdings and Investment Limited. The group holding firm of the Bajaj Group is picking up a 12.8% stake in NMCE, valuing the exchange at nearly Rs 200 crore.
The funds would be used by NMCE to meet its regulatory capital requirement and strengthen its balance sheet for investment in exchange infrastructure, the bourse said, in a statement. NMCE could be looking to raise more funding to meet the regulatory capital requirement.
Bajaj Holdings and Investment holds the promoter group stakes in group companies like Bajaj Auto Limited (BAL) and Bajaj Finserv. It also holds group investments in ICICI Bank and also recently picked up a stake in rating agency Credit Analysis & Research (CARE) .
Equirus Capital acted as the exclusive financial advisor to NMCE for the transaction.
NMCE is strongly positioned in the agro-commodities space with active contracts in multiple commodities including cash crops, food grains, plantations, spices, oil seeds, metals and bullion. In 2008, Reliance Money, the brokerage unit of Anil Ambani's Reliance Capital, picked up a 10% stake in NMCE last year.
NMCE, incorporated in 2002, is promoted by Central Warehousing Corporation and Neptune Overseas limited. Other shareholders in NMCE include National Agricultural Cooperative Marketing Federation of India, Gujarat Agro-Industries Corporation Limited and Punjab National
“We are excited to invest into NMCE. They lead in select agri commodities. We like their grass root connect and the commitment to extend reach to all stakeholders - producers, consumers, industry, intermediaries etc. We are hopeful that the impending regulatory changes & the robust growth envisaged in the physical economy would boost the commodity exchange volumes in India," said Sanjiv Bajaj, Director, Bajaj Holdings.
“Commodity exchange business in India is in nascent stages of evolution. The regulatory framework is evolving towards diversification of products and participants which are expected to
drive exponential growth. Competition in exchanges are expected to harden with new exchange coming in but focused exchanges like NMCE are expected to outperform,” said Pritish Kandoi, Vice President, Equirus Capital.
Shree Renuka Sugars also recently hiked its stake in National Commodity & Derivatives Exchange Ltd (NCDEX) to 12%. The sugar company bought 7% stake from Standard & Poor’s backed rating agency CRISIL in a deal worth Rs 38 crore, valuing NCDEX at Rs 543 crore.