NCDEX builds multi-asset play with mutual fund transaction platform

Commodity exchange launches NCDEX Nidhi with six AMCs and plans to diversify into the equity cash segment by January, subject to Sebi approval

Commodity exchange National Commodity & Derivatives Exchange (NCDEX) on Wednesday launched a mutual fund (MF) transaction platform as part of a broader strategy to transform itself into a multi-segment exchange.

 

The platform, called NCDEX Nidhi, will compete with transaction platforms such as BSE StAR MF, NSE’s MF Invest, and MF Utilities. It has onboarded six asset management companies — Nippon India MF, HDFC MF, Axis MF, LIC MF, Tata MF, and Invesco MF — and plans to increase the count to 20 by the end of August.

 

The exchange said the platform is aimed at expanding MF penetration beyond the top 100 cities by leveraging its agricultural ecosystem and network of farmer producer organisations (FPOs). It has already trained members from 20 FPOs as certified MF distributors after they cleared the mandatory National Institute of Securities Markets examination.

 

 

“These are the segments we have long wanted to reach. As participation widens, clear communication, investor education, and product suitability will be critical. Equally important are strong safeguards against cybersecurity risks and mis-selling,” said Amarjeet Singh, whole-time member of the Securities and Exchange Board of India (Sebi).

 

The platform also offers features such as UPI AutoPay for systematic investment plans (SIPs), end-to-end transaction time-stamping until net asset value allocation, detailed rejection messages instead of error codes, and the flexibility to choose any calendar date for SIP deductions.

 

In its bid to further diversify its offerings, the exchange is targeting an entry into the equity cash segment by January next year, following testing scheduled for November, subject to Sebi approval.

 

The exchange, backed by brokers such as Groww and Zerodha, plans to enter the cash segment first, followed by equity derivatives by July next year, subject to regulatory approvals.

 

NCDEX raised ₹770 crore last year from brokers and investors, including Radhakishan Damani, Ramesh Damani, Madhusudan Kela, and Sunil Singhania, to fund its expansion into new business segments.

 

Earlier this year, the exchange launched weather derivatives with the Rain Mumbai contract and now plans to introduce Rain Chennai, followed by heat derivatives linked to temperature. It has also received regulatory approval to launch platinum contracts in the bullion segment.

 

NCDEX Managing Director and Chief Executive Officer Arun Raste said the exchange has signed memoranda of understanding with the Colombo Stock Exchange of Sri Lanka and the Chittagong Stock Exchange of Bangladesh for knowledge-sharing. Subject to approvals from regulators in the respective countries, the partnerships could eventually extend to product offerings. Raste added that the exchange could also consider launching its initial public offering within the next three to five years. 

In the pipeline

• To leverage network of over 800 FPOs for the MF platform, expanding to smaller towns
• Twenty FPOs already certified as MF distributors
• Platform to offer differentiated features like UPI AutoPay
• Equity cash segment launch targeted by January 2027, subject to approval