FMC rejects USE's plan for 10% stake in new bourse

The exchange is yet to be fully recognised.

Indiabulls-MMTC promoted International Multi-Commodities Exchange is looking for another investor after the markets regulator FMC rejected the United Stock Exchange of India’s (USE’s) 10 per cent stake buy in the bourse, sources said.

While Forward Markets Commission (FMC) Chairman B C Khatua confirmed the rejection, officials at the International Multi-Commodities Exchange (IMCE) could not be contacted. A top MMTC official refused to comment on the issue.

“We have not accepted the 10 per cent equity to be held by USE in IMCE,” Khatua told PTI. He, however, declined to elaborate. Sources said that the FMC has rejected the USE’s application to buy a 10 per cent stake in IMCE on the grounds that the stock exchange is yet to be fully recognised. It has got only ‘in-principle approval’ from Sebi, sources added.

Khatua said that IMCE will get the clearance to commence trading in the commodity exchange after it meets the shareholding guidelines.

“IMCE has taken two months (till September-end) to achieve a closure of its entire Rs 100 crore capital structure,” he said. Initially IMCE was floated as a joint venture between Indiabulls and MMTC, holding 74 per cent and 26 per cent, respectively.

Indiabulls had to look for partners to dilute its stake after the FMC issued guidelines that did not allow a single shareholder to hold more than 40 per cent in a commodity exchange.

So far, Indiabulls has diluted 24 per cent to HDFC Bank, Yes Bank and Indian Potash Ltd, sources said, adding that it is looking for investors to sell the remaining 10 per cent, which was to be sold to the USE.

Indiabulls shares were trading down by 0.45 per cent at Rs 210.95 at 1300 hours on the BSE.