Kotak buys 51% in Ahmedabad Commodity Exchange

Financial services major Kotak Group on Tuesday purchased 51 per cent stake in Ahmedabad Commodity Exchange (ACE). It planned to convert the regional exchange into a national one within a year, said a senior exchange official.

“Kotak purchased 51 per cent stake in ACE after getting an approval from the Forward Markets Commission (FMC),” said Director SA Narayan said.

The group on Tuesday informed the Bombay Stock Exchange about its anchor investor status.

ACE, which deals in castor seed futures, has an average daily trading volume of about 5,000 tonnes.

In May, Kotak had got an approval in principle for the proposed investment.

“ACE will be fully functional as a national exchange within a year after infrastructure for this is in place,” Narayan said, adding that the exchange had to raise its current net worth to Rs 100 crore to get FMC approval.

As per FMC guidelines, the bank, however, has to bring down its stake to 26 per cent or below within two years beginning with the fourth year from the date the exchange is recognised.

In India, there are three national-level commodity exchanges, MCX, NCDEX and NMCE, and 19 regional ones.