FIIs asked to reduce holdings in NCDEX

Foreign institutional investors (FIIs), Goldman Sachs and Intercontinental Exchange, have been asked to bring down their combined holdings to 10 per cent by June 2009.

Chairman and Managing Director of NCDEX R Ramaseshan said as per government stipulations, no FII can hold more than 5 per cent in any commodity stock exchange in the country.

"This has been already informed to the two investors," he said.

In the case of NCDEX, Goldman Sachs held 7 per cent, while the other FII had 8 per cent, with their combined holdings touching 15 per cent.

The other promoters of NCDEX were NSE, Canara Bank, IFFCO, Nabard and Punjab National Bank.

Asked whether NCDEX would make an IPO to provide an exit route to the two FIIs, Ramaseshan said there were no such plans at the moment, adding the exit price would be determined by the promoters.

Daily turnover of the commodity exchange is around Rs 2,500 crore.

NCDEX had recently launched coal contracts, he said, adding the commodity exchange is eyeing 10 per cent of free-price coal which was outside the fuel supply agreement between users and coal companies.

At present, NCDEX has a turnover of 700 tons to 800 tons of contracts daily.

Ramaseshan said Power Exchange Ltd, the joint venture company floated by NSE and NCDEX for starting electricity futures, would start operations from the first week of October.