New IPO Alert! NCDEX May Soon Become Third Exchange in India to go Public

After the successful listing of the Multi Commodity Exchange of India Ltd (MCX) and BSE Ltd on stock exchanges, the National Commodity and Derivatives Exchange Ltd (NCDEX) may soon become the third exchange in the country to list on bourses.

NCDEX, India’s largest agri derivatives exchange, on Tuesday filed a draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) for an initial public offer to raise up to Rs 500 crore.

The proposed NCDEX IPO will entail fresh issuance of equity shares worth Rs 100 crore, while also giving existing investors a window to exit through an offer of sale (OFS) of 1.45 crore shares.

Net proceeds from the fresh issuance of shares will be used by the exchange towards contribution to the Core Settlement Guarantee Fund and funding towards net worth requirements of National Commodity Clearing (NCCL), according to the prospectus.

Meanwhile, investors planning to offload shares in the OFS include Build India Capital Advisors LLP, Canara Bank, Investcorp Private Equity Fund I (formerly IDFC Private Equity Fund III), Punjab National Bank (PNB), Indian Farmers Fertiliser Cooperative Ltd (IFFCO) and the National Bank For Agriculture and Rural Development (NABARD).

The NCDEX website says that the National Stock Exchange of India (NSE) is currently the largest shareholder in the exchange with 15% stake, followed by LIC (11.1%), NABARD (11.1%), IFFCO (10%), Oman India Joint Investment Fund (10%), PNB (7.29%), Canara Bank (6%), IDFC Private Equity Fund (5%), among others.

As of 31 March 2018, NCDEX offered trading in 27 commodity contracts, which included 25 agricultural, 1 bullion commodity contract and 1 metal. The website claims the exchange was founded in 2003 and is leading in agricultural commodities with 85% market share.