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Kotak buys 51% stake in Ahmedabad Commodity Exchange

Financial services major Kotak Group on Tuesday (August 4) purchased 51% stake in Ahmedabad Commodity Exchange (ACE) and plans to convert the regional exchange to a national one within a year, a senior exchange official said. “Kotak purchased 51% stake in ACE after getting an approval from the regulator Forward Markets Commission (FMC),” the Exchange's Director S A Narayan said.

The group today also informed the Bombay Stock Exchange that it is an anchor investor in ACE. “Kotak Mahindra Group has invested in ACE today, having obtained all necessary regulatory and other approvals,” the company said. The Ahmedabad Commodity Exchange, which deals in castor seeds futures, has an average daily trading volume of about 5,000 tonnes.

Kotak in May had got an in-principle approval for the proposed investment. “ACE will be fully functional as a national exchange within a year after infrastructure for this is in place as per the guidelines,” Narayan said, adding, that the exchange has to raise its current net worth to Rs 100 crore to get a final approval from the FMC.

As per FMC guidelines, the bank, however, has to bring down its stake to 26 per cent or below within two years beginning with the fourth year from the date of recognition of the exchange. In India, there are three national level exchanges MCX, NCDEX and NMCE and 19 regional bourses.

Source: Times Now


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