NMCE's bullion spot market plan hits roadblock

The National Multi-Commodity Exchange (NMCE), country’s first commodity exchange which is gearing up to launch an agriculture spot exchange, has put its bullion spot exchange plan on the back burner.

“As of now, we have shelved our plan to launch the bullion spot exchange,” NMCE chief executive Anil Mishra told the media here. He, however, refused to divulge the reasons on why it was not going ahead with the plan at this point in time.

Originally, NMCE, Reliance Money, the Bombay Stock Exchange (BSE) and the Bombay Bullion Association (BMA) had joined hands to set up the country’s first Bullion Spot Market (BSM).

It may be recalled that the Anil Dhirubhai Ambani Group (ADAG) firm Reliance Money had acquired 10 per cent equity in NMCE in October last year, with the Forward Markets Commission (FMC) approval to pick up an additional 16 per cent. However, Reliance Money’s proposal to have additional equity also hit a roadblock over valuation issues.

Continuing its drive to tap the precious metal segment, NMCE is gearing up to partner a company having pan-India presence in physical trading of bullion items.

“Talks are in an advance stage and the name of the company will be disclosed soon,” Mishra added. The company, which NMCE is in talks with, has around 1,000 delivery centres across the country.

The Ahmedabad-based commodity exchange has set the ball rolling for starting spot exchange for agri commodities. NMCE, in collaboration with the existing agriculture produce marketing committees (APMCs), is coming up with a spot exchange called National APMC.

The registration has already been done and the exchange is awaiting Gujarat government’s nod to start the operations. “We expect to start operations of the spot exchange within two months,” he said.

Buoyed by the 142 per cent growth in its turnover in the 2008-09 financial year, NMCE has set a target of achieving 200 per cent growth in the current fiscal.

In the first quarter of the current financial year, its grew 382 per cent to Rs 86,074 crore, as compared with Rs 17,829 crore in the same period last year.