ICEX, NMCE to merge, form India’s third biggest commodity bourse

Indian Commodity Exchange (ICEX) will merge National Multi Commodity Exchange (NMCE) with itself creating the country's third biggest commodity exchange, the two commodity bourses announced in a joint statement issued today.

As per the merger deal approved by the boards of both exchanges, ICEX will hold 62.8 per cent stake in the merged entity while NMCE shareholders will own the remaining 37.2 per cent.

The merger, which is subject to regulatory approvals, is expected to be completed by December, the companies said.

National Multi Commodity Exchange (NMCE), India's first demutualised

online commodities exchange.

The merger will create India's third largest commodities exchange, offering a wide range of contracts, including bullion, oil, rubber and other agri-commodities.

Currently, Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX) are the top two commodity bourses in the country, followed by ICEX, the third-largest.

The exchange will also offer the world's first diamond futures contract that has already received 'in-principle' approval from market regulator Sebi.

''The merger will result into greater financial strength, consolidation of clients and members, enhanced product basket and higher operational synergies, helping ICEX to further strengthen its position in the fast growing commodity derivatives market in India,'' said Sanjit Prasad, MD & 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.

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 is expected to be completed by December 2017, subject to regulatory approvals.