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Reliance Money buys 26% stake in commex

Reliance Money, the financial products distribution arm of the ADAG, is acquiring a 26% stake in Ahmedabad-headquartered National Multi-Commodities Exchange (NMCE), the third largest commodities bourse in the country in terms of turnover, for an undisclosed sum of money. Reliance Money and NMCE are expected to approach Forward Markets Commission (FMC), the commodities market regulator, for approvals.

“We are in talks with NMCE to buy 26% in the exchange,” Sudip Bandyopadhyay, director and CEO, Reliance Money, told TOI. “Looking at the growing opportunities in the commodities space, we are planning to enter this space in a big way,” Bandyopadhyay said. Post-deal, the ADAG company would get two board seats on NMCE.

Reliance Money's decision to buy into the commodities bourse came in after the government recently announced new norms for investors intending to buy into commodities bourses. Among those rules is a minimum networth requirement of Rs 100 crore and limiting a single investor's holding at 26%.

NMCE, the oldest of the three large commodities boureses with a national presence, is strong in three agro commodities pepper, rubber and raw jute. It also has presence in commodities like isabgul, sacking and rapeseed.
One of its main shareholders is Central Warehousing Corp (CWC), the central government arm that has the largest chain of warehouses around the country, which holds a 26% stake.

Other shareholders in NMCE are Punjab National Bank, Gujarat Agro Industries, Neptune Overseas, National Agricultural Cooperative Marketing Federation (NAFED) and Gujarat State Agricultural Marketing Board. Bombay Stock Exchange (BSE), the oldest stock exchange in India, had announced in February its intentions to buy a 26% stake in NMCE. The deal is yet to be closed.

The new shareholding pattern, after the deal, and other details related to the transaction would be decided soon.
Bandyopadhyay said that Reliance Money's plan is to leverage its own presence in 5,000 locations and also on CWC huge chain of warehouses, one of the main logistical advantages required in commodities business.

“We plan to leverage on these advantages to expand NMCE's businesses to rural agro sectors around the country,” he said.
Source: Times of India

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