Anil Ambani, Kotak eye commexes

According to The Times of India the Reliance Anil Ambani group is believed to have decided to enter the commodity trading business by setting up a large exchange in the country as part of its plans to capitalise on the vast opportunities in this market.

Besides R-ADAG, another corporate giant Kotak group is also mulling over setting up a commodity bourse by acquisition of some regional exchange to get the platform and other technical support, sources close to the development said.

The group is already present in the commodity brokerage business through Reliance Money. Even as the group officials did not wish to comment, sources said the new business could have some existing bourses as well as a strategic associate as partners to gain technical, business and infrastructure support.

Another emerging conglomerate Indiabulls group, which is present in businesses like brokerage, financial services, real estate, retail and power have already tied up with state-run trading firm MMTC to start a commodity exchange, for which it is awaiting necessary approvals.

Deutsche may buy 5% in DSE

German multinational bank, Deutsche Bank, is likely to buy a 5% stake in the Delhi Stock Exchange (DSE). If the deal happens, this would be the fourth major foreign investment in DSE after US-based Lamb Company, New Vernon Private Equity and Passport Global Master Fund SPC (British Virgin Islands) picked up stakes in the stock exchange.

The DSE got de-mutualised in August 2007 and has around 2,800 companies listed on the exchange with 1,800 companies trading exclusively on it.Earlier, the Foreign Investment Promotion Board (FIPB) had approved four foreign investors — Wilmette Holdings, Mauritius, Noor Financial Investment Company, Kuwait, Ikarus Industrial Petroleum Company, Kuwait and Kuwait Privatisation Projects Holding Company, Kuwait to pick 5% stake in the DSE, but the deal didn’t work out. DSE executive director Harjit Singh Sidhu declined to comment on the developments.

After the government announced that it will allow up to 49% foreign stake (including both FII and FDI) in Indian exchanges, a list of foreign companies have bought stake in Indian stock exchanges. The latest expression of interest came from Nasdaq, the largest electronic equity securities trading market in the US, to partner with Ahmedabad Stock Exchange (ASE).

Earlier this year, NYSE Euronext bought 5% stake in the Multi Commodity Exchange (MCX) for $55 million. The government has, however, capped foreign ownership for a single investor in commodities exchanges at 5%.

At DSE, foreign stake holders hold 15% stake and 36% stake is with private investors such as Parsvnath, Omaxe, BCCL and NDTV. Analyst believe that investment from foreign partners will add value and help regional exchanges acquire advanced technology.

Ahmedabad Comm bourse up for sale

After India Bulls-MMTC's announcement of setting up commodity exchange, Kotak Mahindra Bank is all set to acquire controlling stake in the 50-year-old Ahmedabad Commodity Exchange (ACE).With capital infusion from the banking and financial services conglomerate, ACE will be the first regional exchange in India to be corporatised and de-mutualised national exchange. It would become a online screen-based exchange with technical upgradation.

Kotak Mahindra is picking up 51% equity stake in ACE at a price of Rs 321 per equity share. Though both Kotak and ACE remain tight-lipped about the development, a notice issued to the shareholders of the exchange says: “It is proposed to issue and allot to Kotak Mahindra Bank Ltd and/or its associates or subsidiaries upto 1,02,000 equity shares at a price of Rs 321 per equity share and upto 1,050,000 share warrants excersible to the extent of short falls in meeting the funding needs of the company through any issue/rights issue of equity shares within 36 months of from the date of allotment of the warrants at a price of Rs 321 per warrant exercised.”

Read more in The Times of India article.