Iffco, RCF may set up national commodity bourse

Mumbai-based information technology firm IT People (India) has proposed to set up a national-level commodity exchange, in association with Indian Farmers Fertiliser Cooperative Ltd (Iffco) and public sector Rashtriya Chemicals and Fertilizers Ltd (RCF).

If approved, this would be be the sixth national-level exchange to offer hedging in commodity futures. A source said the three companies had joined hands to float a new entity with initial equity capital of Rs 100 crore, the minimum net worth required for setting up an exchange.

“We have sent our proposal to the regulator, the Forward Markets Commission (FMC), about two-three months ago and the response is still awaited,” said Ketan Sheth, managing director of IT People. “The exchange, which is yet to be named, will be the second public-private partnership (PPP) in the country, the first being the MMTC-Indiabulls’ promoted Indian Commodity Exchange (ICEX).”

FMC sources confirmed receipt of the proposal. “W are considering it,” said a senior official. However, U S Jha, chairman and managing director of RCF, indicated the proposal still needed firming up.

“There is no firm decision; we have had some initial discussions on that. The matter has been forwarded to the Board and a final decision is yet to come. Hence, I cannot say that a concrete decision has been taken to set up a commodity exchange.”