Reliance Capital, the financial arm of Reliance Anil Dhirubhai Ambani Group, has acquired 26% stake in Indian Commodity Exchange Limited (ICEX) from Indiabulls Financial Services Limited through its subsidiary Reliance Exchangenext Limited (R Next) for an undisclosed amount to become the anchor investor of the exchange.
ICEX is a screen based on-line derivatives exchange for commodities, promoted by public sector MMTC Ltd and Indiabulls Financial Services. Following the transaction, Indiabulls has been left with 14% stake in the exchange.
R Next has already received necessary regulatory approvals for completing this transfer and being an anchor investor in ICEX. Rajnikant Patel, President & CEO of R Next, has been inducted as a whole time director in ICEX. Patel is the former MD & CEO of Bombay Stock Exchange, who was roped in by Anil Ambani to grow the exchange business. Reliance Money already has at least 10% stake in National Multi-Commodity Exchange.
“We see a huge potential in the commodity market space. With this, we plan to develop an integrated and transparent national electronic commodity market place. ICEX has pedigreed investors and we look forward to working with them for taking ICEX to next level of growth”, said Rajnikant Patel.
R Next has already set up national commodity spot exchange through its wholly-owned subsidiary - Reliance Spot Exchange (RSX).
RSX, an electronic mandi that focuses on agri commodities, offers an integrated solution of warehousing, collateral management, quality testing, assaying & grading and other value added services through its e-auction platform.
“We feel there was a need to have an integrated spot and futures market and see a great synergy between these two institutions. ICEX and RSX both offer complementary products. ICEX will be able to offer physical delivery facility to its members while RSX members will have the ability to hedge. This will immensely benefit members of both the exchanges and upgrade the existing ecosystem,” Patel said.
When contacted, a Reliance Capital Spokesperson declined to comment on the financial details of the transaction. ICEX is the fourth national-level commodity bourse, which offers futures trading in 18 commodities, including bullion, metals and agricultural items.
Public sector trading giant MMTC Ltd owns 26%, Indian Potash Ltd 10% and KRIBHCO and IDFC have 5% each in the exchange. In September last year, commodity markets regulator FMC had given approval to the Anil Ambani led Group to acquire 26% stake in Indian Commodity Exchange (ICEX) from Indiabulls.
Besides NMCE and ICEX, other national level commodity exchanges in India include National Commodity and Derivatives Exchange (NCDEX) and Financial Technologies-promoted Multi-Commodity Exchange (MCX). Another bourse is ACE Derivatives and Commodity Exchange, promoted by Kotak Mahindra Bank, which was given national level commodity exchange status last year.