NMCE gets 6 mths more to meet capital norms

Commodity markets regulator FMC today said it has given a six-month extension till March 31 for the National Multi-Commodity Exchange (NMCE) to shore up its capital to meet regulatory norms.

"NMCE has been granted an extension of time for a period of six months from October 1, 2011, to March 31, 2012, for compliance with the guidelines on equity structure," the Forward Markets Commission (FMC) said in the statement.

In its July, 2009, guidelines on equity structure norms for five-year-old national commodity exchanges, the FMC laid down a net worth criterion of Rs 100 crore, of which equity capital had to be Rs 50 crore. The earlier deadline for compliance with the norm was September, 2011.

NMCE currently has a net worth -- equity plus reserves and surplus -- of Rs 65 crore and an equity capital of Rs 19.12 crore, the bourse's Managing Director and CEO Anil Mishra said.

Expressing confidence on NCME's ability to meet the paid-up capital norm within the revised deadline, Mishra said: "We are in talks with domestic entities for a stake sale and we are confident of closing the deal before the deadline of March."

The exchange will also consider rights or bonus issues to boost its capital base to meet the regulatory norms, he added.

In October, 2010, NMCE sold a 12.82% stake to Bajaj Holdings and Investment Ltd for Rs 25 crore toward meeting the capital requirement guidelines.

Other major shareholders in NMCE include Neptune Overseas Ltd, state-run Central Warehousing Corporation, Bajaj Holdings and Reliance Money, among others.

NMCE, known for trading in spice and plantation crops, recorded a turnover of Rs 27,826 crore in December, 2011.

The government permitted commodity futures trade in 2003 and the country now has 21 commodity exchanges, including five national-level bourses.