Commodity Online
NEW DELHI: Global investment major Goldman Sachs that holds a strategic stake in India’s second largest commodity bourse National Commodity and Derivatives Exchange (NCDEX) is all set to reduce its stake in the exchange.

Goldman’s decision to dilute its stake at NCDEX comes in the wake of new foreign investment guidelines from the Indian government.

According to guidelines by India’s Department of Industrial Policy and Promotion (DIPP), individual foreign companies holding stakes in Indian commodity exchanges in excess of 5 per cent cap will have to divest their holding to the required five per cent cap by June 30 this year.

NCDEX officials said Goldman Sachs Investments will have to dilute its stake by two per cent to five per cent in NCDEX June 30 this year to meet the foreign investment requirements.

The company recently sought ex-post facto approval for acquisition of equity shares representing seven per cent of equity in NCDEX and divestment of excess investment by two per cent by June 30 from Foreign Investment Promotion Board (FIPB).

Goldman Sachs did not have any need to come to FIPB to seek ex-post facto approval, as they do not violate any regulations as of now.

To a proposal by Goldman Sachs Investments (Mauritius) Ltd, the Government has merely said it has noted the proposal as the applicant has invested at a time when there was no policy on FDI in commodity exchange.

Merrill Lynch, Citigroup, Passport India Investment (Mauritius) and GLG Financials Fund have stakes in India’s largest commodity bourse, the Multi Commodity Exchange.

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