You are here: Home » Companies » News
Business Standard

MMTC aims to complete stake sale in Indian Commodity Exchange by 2017-end

MMTC is exiting ICEX as being a minor equity participant, it would be deprived of any say in decision making

Jayajit Dash  |  Bhubaneswar 

MMTC

State-run trading entity Ltd is looking at completing the sale of its residual 9.55 per cent stake in Ltd (ICEX) by the end of this financial year.

A source close to the development said has already invited (EoI) from interested bidders to acquire its stake in the commodity exchange.

aims to divest 32 million equity shares of face value of Rs five each through a competitive bidding process. It has appointed Keynote Corporate Services Ltd as the consultant and investment banker for the transaction.

Ved Prakash, chairman and managing director of Ltd did not respond to phone calls nor answered text messages.

The divestment of 9.55 per cent equity would mark MMTC's exit from the bourse. is presently the third biggest shareholder in after Next which has 26 per cent stake and Ltd with a shareholding of 10.45 per cent. Other key corporate shareholders are Abhinay Trading Pvt Ltd (8.36 per cent), Indian Potash Ltd (8 per cent), Adventz Finance Pvt Ltd (4.48 per cent), Krishak Bharti Cooperative Ltd (4 per cent) and IDFC Bank Ltd (2.99 per cent). Bharti Infratel chairman Akhil Gupta owns five per cent five per cent stake in which also has Bollywood celebrities Aamir Khan (0.6 per cent) and Ranbir Rishi Kapoor (0.3 per cent) as shareholders.

is exiting as being a minor equity participant, it would be deprived of any say in decision making. Besides, the commodity exchange did not take off in a big way with trading being suspended for three years. ICEX, however, has restarted with diamond futures contracts. The exchange also has approvals for light sweet crude oil and Brent crude oil contracts.

With the approval of its board in September 2007, participated in setting up a joint venture in association with India Bulls Financial Services Ltd (IBFSL) to establish a national stock exchange.

On July 17 2008, commodities market regulator Forward Markets Commission (FMC) granted in-principle approval and subsequently, was incorporated on August 12, 2008. FMC granted recognition to on October 9, 2009 and commercial operations started on November 27, 2009.

On February 12, 2009, a shareholder agreement was signed between MMTC, IBFSL and IBFSL and held 40 per cent and 26 per cent equity respectively. The balance 34 per cent was held by other investors. But, in December 2010, IBFSL transferred 26 per cent shareholding in to Next Ltd. Later, in January 2016, also sold its 10 per cent stake in to Akhil Gupta and another Delhi-based investor Vijay Sharma of B N Enterprises.

Poor financial performance during 2013-14 and eroding net worth led to suspending trading operations in April 2014. FMC had issued a show-cause notice for cancelling recognition in August 2013.

ICEX's key shareholders were mandated to present a credible revival plan before FMC to prevent the government from scrapping its license. In April 2016, closed a Rights Issue of Rs 50 crore at 100 per cent premium of Rs five per share. This was followed by a second Rights Issue of Rs 85 crore in March 2017. did not participate in any of the Rights Issues and its effective equity fell to 9.55 per cent.

First Published: Wed, December 20 2017. 01:55 IST
RECOMMENDED FOR YOU