National Commodity Exchange mulls rights issue

"We have to increase our equity capital by Rs.20 crore to Rs.50 crore and the net worth by Rs.30 crore to Rs.100 crore by September 2010," R. Ramaseshan, the NCDEX managing director and chief executive, told IANS.  
"The deadline is extendable by a year. We are mulling options like a rights issue for the purpose," he said.
The central government has stipulated the minimum equity capital and the net worth for commodity exchanges at Rs.50 crore and Rs.100 crore respectively.
"As the issue will be at a premium, the net worth will automatically increase along with the equity base," Ramaseshan said.  
Currently, the equity of NCDEX is held by 10 companies.   
The National Stock Exchange, the National Bank for Agriculture and Rural Development and the Life Insurance Corporation of India hold 15 percent each, while Crisil and IFFCO hold 12 percent each.
Punjab National Bank, Canara Bank, Goldman Sachs, Intercontinental Exchange and Shree Renuka Sugars Ltd hold the balance stake.
NCDEX is the country's largest agricultural commodity exchange with 98 percent of its business coming from trading in farm produce.
According to Ramaseshan, the exchange has around 800 members. It lost around eight percent of its membership due to the economic downturn.
"Around 50,000 tonnes of agricultural commodities come for delivery every month and the exchange has storage space for 150,000 tonnes," he added.

Liked the story?

  • 0

  • 0

  • 0

  • 0

  • 0