Commodity Online
MUMBAI: In an interesting development, India’s largest stock exchange the National Stock Exchange (NSE) may opt to sell stake in Multi-Commodity Exchange (MCX), the country’s leading commodity bourse.

NSE officials said that the stake sale is a strategic move to exit from MCX, as NSE holds majority stake in MCX’s rival National Commodities and Derivatives Exchange (NCDEX).

”We want to aggressive promote NCDEX and therefore, we feel that NSE needs to exit by selling the small stake it owns in MCX,” a senior NSE official told Commodity Online.

He said NSE has already written to MCX, informing that it would like to exit from the commodities exchange when the latter do the offer for sale or initial public offer (IPO) next.

NSE had bought a 2.56 per cent stake in MCX in May 2005, amounting to 1 million equity shares of Rs 10 each at the time.
MCX had filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) in February 2008. According to that DRHP, NSE owns 20 lakh equity shares of Rs 5 each, amounting to 2.56 per cent in MCX after the equity shares were subdivided in September 2007. After the IPO, NSE’s stake would have gone to 2.38 per cent.

The last MCX stake sale of 15 per cent was made to Merrill Lynch (5 per cent), Citigroup (5 per cent), Passport India Investment (Mauritius) (3 per cent) and GLG Financials Fund (2 per cent) after which FTIL’s shareholding in MCX declined to 49 per cent.

MCX is the second largest exchange in silver in the world, the third largest in gold; the exchange clocked a record turnover of Rs Rs. 22,93,723.7 crore during the financial year 2006-07.

MCX has entered into various strategic agreements with global exchanges like The Tokyo Commodity Exchange (TOCOM); The Baltic Exchange, London; Chicago Climate Exchange (CCX); New York Mercantile Exchange (NYMEX), London Metal Exchange (LME); Dubai Multi Commodities Centre (DMCC); New York Board of Trade (NYBOT) and Bursa Malaysia Derivatives, Berhad (BMD).