Two commodity exchanges merge

NMCE-ICEX union to create third-largest commodities exchange in the country

Swap deal: ICEX shareholders will hold 62.8% stake and NMCE shareholders the rest, post merger.

National Multi Commodity Exchange (NMCE), India’s first de-mutualised online national multi-commodities exchange, will merge with the Indian Commodity Exchange (ICEX).

The boards of the two exchanges have approved the merge move, said a joint press release. The proposed merger will create the country’s third-largest commodities exchange.

Swap ratio

As per the agreed swap ratio, ICEX shareholders will hold 62.8% stake and NMCE shareholders 37.2% stake in ICEX, post merger, which is subject to required regulatory approvals. The merger is expected to be completed by December 2017.

The merged entity will have prominent shareholders from both exchanges, including MMTC, Indian Potash, Krishak Bharti Cooperative (Kribhco), IDFC Bank, Indiabulls Housing Finance, Reliance Capital, Bajaj Holdings, Central Warehousing Corporation, Punjab National Bank and Gujarat Agro Industries.

“The merger will help ICEX to further strengthen its position in the commodity derivatives market in India,” said Sanjit Prasad, MD and CEO of ICEX. “The large base of warehousing facilities of CWC with storage capacity of 9.89 million tonnes will become available to the combined entity pan India, which will help generate more liquidity due to wider participation of the larger base of active members of the combined entity,” said Anil Mishra, MD & CEO, NMCE.

ICEX is a deemed recognised stock exchange providing a nationwide online trading platform in commodity derivatives. It has put in place assaying and warehousing facilities in order to facilitate deliveries. Reliance Capital is its largest investor.

NMCE is the first de-mutualised, online multi-commodity exchange in India, set up in October 2002.