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| USE to acquire stake in Indiabulls' exchange |
| Rajesh Bhayani / Mumbai May 26, 2009, 00:41 IST |
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Action is picking up in the exchange industry as new entrants take on the emerging competition. The United Stock Exchange of India (USE), which has received regulatory nod for currency futures, has picked up 10 per cent in the new entrant in commodity futures, the International Multi Commodities Exchange (IMCE), promoted by Indiabulls and Minerals and Metals Trading Corporation (MMTC), a leading public sector trading company.
The stake sale is at par. The IMCE has a capital base of Rs 100 crore. Out of this, the USE has picked up 10 per cent for Rs 10 crore.
The deal ensures synergy for both as Indiabulls was told by the commodity futures regulator, the Forward Market Commission (FMC), to dilute its stake. Now, Indiabulls holds 40 per cent in the IMCE, MMTC holds 26 per cent, Indian Potash, a PSU, holds 10 per cent, while an investor holds the rest. For the USE, the deal bring the benefit of a stake in a commodity futures exchange. MMTC is the common shareholder in both the exchanges, said sources in the USE.
At present, MCX and NSE have commodity futures and currency futures. Both USE and IMCE are expected to launch operations in the next couple of months.
The USE is promoted by 17 entities comprising 13 banks and four trading companies, including Bank of India, Bank of Baroda, Punjab National Bank, Union Bank, Federal Bank, MMTC and Jaypee Capital. The latest one to join as a shareholder is leading housing financier, the Housing Development Finance Corporation Limited.
The USE will launch its membership drive in the next two weeks. The membership deposit would be Rs 15 lakh and there would be no transaction charge initially.
The exchange is also tying up with various trade and industry bodies and a couple of education institutions to launch awareness campaigns. The aim of the drive is to build awareness about the market, get small and medium enterprises educated about the currency futures and the new platform to trade on the exchange and to educate them about the benefits of hedging their currency risk.
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