Business Standard

FMC wants listed firms to disclose commodities hedging

The Committee had suggested that listed firms should disclose their exposure in commodities hedging

Press Trust of India  |  New Delhi 

Commodity regulator today said it will soon discuss with the Securities and Exchange Board of India (SEBI) the possibility of making it mandatory for listed companies to disclose their exposure in hedging.
   
The companies hedge in commodities to offset risks arising out of fluctuations in raw-material prices."We will soon write to on this issue. In fact, this was the recommendation of our Sub-committee," Forward Markets Commission Ramesh Abhishek told PTI.
     
The Committee had suggested that listed firms should disclose their exposure in commodities hedging saying such information will benefit both the companies and the commodity market, he said.
     
Currently hedging in Indian commodity bourses is taking place on a very small scale with scope for development.
Efforts are being made to create awareness about its advantages, the regulator added.
     
Citing benefits of hedging, leading agri-commodity bourse NCDEX Managing Director In-charge Samir Shah said companies having exposure in commodities will be able to lock their business margins and protect themselves from price fluctuations in the market.
   
"The companies would also be able to access more cost effective financing from banks. The banks could lend more cost-effectively to companies who have hedged their commodities," he added.
     
There are 22 commodities bourses in the country, of which 6 are operating at national level. 

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FMC wants listed firms to disclose commodities hedging

The Committee had suggested that listed firms should disclose their exposure in commodities hedging

Commodity markets regulator FMC today said it will soon discuss with the Securities and Exchange Board of India (SEBI) the possibility of making it mandatory for listed companies to disclose their exposure in commodities hedging.
Commodity regulator today said it will soon discuss with the Securities and Exchange Board of India (SEBI) the possibility of making it mandatory for listed companies to disclose their exposure in hedging.
   
The companies hedge in commodities to offset risks arising out of fluctuations in raw-material prices."We will soon write to on this issue. In fact, this was the recommendation of our Sub-committee," Forward Markets Commission Ramesh Abhishek told PTI.
     
The Committee had suggested that listed firms should disclose their exposure in commodities hedging saying such information will benefit both the companies and the commodity market, he said.
     
Currently hedging in Indian commodity bourses is taking place on a very small scale with scope for development.
Efforts are being made to create awareness about its advantages, the regulator added.
     
Citing benefits of hedging, leading agri-commodity bourse NCDEX Managing Director In-charge Samir Shah said companies having exposure in commodities will be able to lock their business margins and protect themselves from price fluctuations in the market.
   
"The companies would also be able to access more cost effective financing from banks. The banks could lend more cost-effectively to companies who have hedged their commodities," he added.
     
There are 22 commodities bourses in the country, of which 6 are operating at national level. 
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