Goldman Sachs and US exchange IntercontinentalExchange (ICE) are in talks with Shree Renuka Sugars to divest part of their stakes in agri bourse National Commodity & Derivatives Exchange (NCDEX), reports Economic Times. Goldman currently holds 7% of NCDEX while ICE has an 8% stake.
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Bishnu Charan Khatua, chairman of Forward Markets Commission (FMC), the commodity bourses regulator, hs confirmed the development to the daily. The deal is subject to first right of refusal by existing shareholders of NCDEX.
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Press Note 2 issued by the Ministry of Commerce in March 2008 states that no single foreign investor/entity, including persons acting in concert, can hold more than 5% stake in a local commodity bourse, while combined FII and FDI investment has been capped at 49%.
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This development comes in conjunction with Financial Technologies India (FTIL) selling a 5% stake in its newly promoted Multi Commodity Stock Exchange (MCX-SX) for Rs 250 crore to IFCI, a state-run non-banking finance company.
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Foreign stakeholders, which hold over 5% in local commexes, have time till September-end this year to bring down their stakes. Goldman Sachs purchased a 7% stake from ICICI Bank in 2006 for Rs 106 crore, while ICE bought ICICI’s remaining 8% stake in the same year for $37 million.
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The current shareholders in NCDEX include NSE, LIC and UTI with 15% stake each while Crisil and Iffco hold 12% each, and Punjab National Bank and Canara Bank each have 8% stake.
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NCDEX Looks To Expand In South
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The National Commodity and Derivatives Exchange (NCDEX) is looking to boost its presence in south India and is working on expanding its non-agricultural commodity offerings, reports Reuters quoting a top official.
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"The south has not been done... The quantity of agricultural produce in the four southern states is huge," said Vijay Kumar, newly-appointed chief business officer of the bourse. The exchange derives most of its business from the western, north and central regions of India.
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The exchange is looking to offer up to 10 non-agricultural commodities but did not disclose details about timelines, adds the Reuters report. NCDEX is India's second biggest commodity exchange by trade turnover and controls about 88 percent of the trade in agricultural commodities.
