The Commodity exchange business is currently dominated by two major players MCX and NCDEX
New Delhi : Leading bourse BSE is planning to launch a separate platform for trading of various commodities to foray into commodity exchange business — currently dominated by two major players, MCX and NCDEX.
A proposal in this regard has been approved by the board of BSE, which is the world’s largest stock exchange in terms of number of listed companies and holds top positions on various other counts. Sources said the BSE board has cleared the proposal and further modalities would be put in place soon.
Incidentally, BSE had also put in an initial bid, estimated at about Rs 500 crore, recently for purchase of 15 per cent stake in the country’s largest commodity exchange Multi Commodity Exchange (MCX).
Kotak Group finally acquired the MCX stake for Rs 459 crore, while BSE and another bidder Reliance Capital did not participate in final bidding due to adverse comments made by the exchange’s auditors in the wake of NSEL scam. The commodity trading business in India records total turnover of over Rs 100 lakh crore annually, although only two players dominate the market.
There used to over 20 commodity exchanges in India, including six of national-level, but the total number has now come down to ten. This includes four national-level bourses. Volumes have also come down in recent quarters, due to imposition of commodities transaction tax, among others.
BSE, which was set up in 1875 and is the oldest exchange in Asia, is currently one of the two major bourses in India. There are more than 5,500 firms listed, which is highest for any exchange in the world, with a total market capitalisation of over Rs 93 lakh crore.
