NMCE set for Rs 100 cr capital infusion

Ahmedabad-based National Multi Commodity Exchange (NMCE), the online multi-commodity exchange, is set to receive Rs 100 crore of fresh capital infusion.

In the process, the promoters' stake will come down to 18 per cent, while that of individual investors will decline to around 17 per cent.

This equity dilution is taking place to accommodate Bombay Stock Exchange (BSE), which has been allotted new shares amounting to 26 per cent stake in the exchange.

NMCE was the first new-age exchange to begin operation after the government issued licence to three exchanges for online commodity futures in 1999.

It sold a 26 per cent stake to BSE recently. Since this was a fresh issue of shares and other investors such as Central Warehousing Corporation (CWC) and Nafed did not want to reduce their stakes, the promoters and individual investors have decided not to buy more shares, thereby bringing down their holding in the exchange.

When contacted, NMCE Managing Director Kailash Gupta declined to comment on the developments. Sources in the know said that the fresh dose of capital and presence of BSE as strategic investor would help the exchange improve its image and increase the market share.

BSE CEO Rajnikant Patel has been appointed as professional director on the governing board of NMCE. It is understood that trading facilities on NMCE will be made available to 15,000 terminals of BSE. The modalities for this are being worked out.

The valuation for the stake sale to BSE is not known, but the new capital infusion with a premium will be around Rs 100 crore.

NMCE's core strength lies in trade of plantation commodities such as cardamom, rubber and black pepper. In cardamom and rubber, NMCE's market share is 75.2 per cent, while that of MCX in the above commodities is 24.8 per cent. At present, 5 to 6 commodities are generally traded on the exchange.