BSE to pick 26 pc in commodity exchange | business | Hindustan Times
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BSE to pick 26 pc in commodity exchange

business Updated: Feb 25, 2008 21:00 IST
Vyas Mohan
Vyas Mohan
Hindustan Times
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In a bid to expand its business into commodities trading, the Bombay Stock Exchange said on Monday that it would buy a 26 per cent stake in Ahmedabad-based National Commodity Exchange of India (NMCE).

BSE Managing Director and CEO Rajnikant Patel and NMCE Managing Director Kailash Gupta sealed the deal in the presence of the Forward Markets Commission Chairman BC Khatua.

"Things are changing and the objective is to bring in synergies together and take the business forward. We are focussed on transforming the exchange. It denotes BSE's expanding horizon in the financial markets," said Patel.

Though BSE officials refused to reveal the value of the deal owing to a confidentiality clause, an NMCE official said the value of fresh capital infusion into the commodity exchange could be around Rs 100 crore. The development unfolds almost a week after NYSE Euronext picked up 5 per cent in the Multi Commodity Exchange (MCX) for Rs 240 crore.

Besides benefiting from a century-old experience in running Asia's oldest bourse, the tie-up with BSE is likely to help NMCE clock higher volumes as it rides the BSE's wide trading platforms.

The fresh equity infusion will bring down the stake of Neptune Overseas from around 25 per cent to under 20 per cent.

Other major shareholders of the NMCE at present include Central Warehousing Corporation (26 per cent), Nafed and Punjab National Bank (about 10 per cent each) and Gujarat Agro Industries Corporation (around 5 per cent).

NMCE commenced futures trading in 24 commodities in 2002 on a national scale and the basket has grown substantially since then to include cash crops, foodgrains, plantations, spices, oil seeds, metals and bullion among others.