MMTC, the state-controlled trading company, is rethinking a previous decision to sell its residual 9.5 per cent equity in Indian Commodity Exchange Ltd (ICEX).
“We see promise in ICEX’s diamond futures business. This is the country’s only exchange in such transactions. MMTC will rope in a merchant banker to advise the company on retaining our equity in the exchange,” said an MMTC official.
Initially, MMTC had 26 per cent of the equity in the exchange but its stake had gradually shrunk. Last year, its board of directors had decided to sell off its 9.5 per cent stake, marking its exit from the bourse. It had thought that being a minor equity participant did not make much sense, as it would be deprived of a say in decisions. The exchange had also not taken off as planned; trading was suspended for three years.
MMTC had invited an Expression of Interest (EoI) from interested bidders to acquire its stake. The company aimed to divest 32 million equity shares of Rs 5 face value each, through competitive bidding. However, this drew tepid interest and MMTC decided on a new EoI. Now comes the latest thinking.
With the approval of its board in September 2007, MMTC had participated in setting up a joint venture in association with India Bulls Financial Services (IBFSL) to establish a national stock exchange. In July 2008, the commodities market regulator, the Forward Markets Commission (FMC), granted in-principle approval. ICEX was incorporated the following month. FMC granted recognition to ICEX in October 2009 and commercial operations started at end-November.
In the shareholder agreement signed in February 2009, IBFSL and MMTC held 40 per cent and 26 per cent of the equity, respectively. The rest was withy other investors. Then, in December 2010, IBFSL transferred 26 per cent shareholding in ICEX to Reliance Exchange Next Ltd. Later, in January 2016, MMTC sold 10 per cent stake to Akhil Gupta and another Delhi-based investor, Vijay Sharma of B N Enterprises.
MMTC is presently the third biggest shareholder in ICEX, after Reliance Exchange Next with 26 per cent and Indiabulls Housing Finance with 10.45 per cent. Other key corporate shareholders are Abhinay Trading (8.36 per cent), Indian Potash (eight per cent), Adventz Finance (4.48 per cent), Krishak Bharti Cooperative Ltd (four per cent) and IDFC Bank (2.99 per cent). Bharti Infratel chairman Akhil Gupta owns five per cent and a couple of filmstars have minor stakes.