Two Indian exchanges – Anil Dhirubhai Ambani Group-promoted Indian Commodity Exchange (ICEX) and Metropolitan Stock Exchange (MSE) – are in initial talks for a merger. For ICEX, a merger will enable it to get access to readymade stock market platform.
ICEX clocks an average daily turnover of around Rs 200-300 crore which is around 1% of the overall commodity derivatives market turnover.
ICEX is on the growth trajectory of very strong financial foundation. Our net-worth is well above the mandated criteria and after merger with erstwhile NMCE (National Multi-Commodity Exchange), the net worth has increased substantially to sustain its business on its own. The exchange has witnessed 10x growth in volumes of Diamond contracts compared to last year,” ICEX said.
The Indian Commodity Exchange (ICEX) would launch pepper and cardamom contracts in its platform in the near-future. The exchange is the first to launch the world’s first diamond derivatives contracts in August last year.
ICEX launched derivatives in diamond and steel as India was a major player in both the commodities. India has a 70% share in cutting and polishing of diamonds and in steel we are the second largest market. The company has daily turnover of Rs 100 crore in diamond contracts and Rs 20 crore in steel. It is looking at a daily turnover of Rs 500-600 crore in diamond alone by the next quarter with Sebi approving foreign entities having actual exposure to Indian physical commodity markets to trade in the commodity market .
Last year, ICEX had merged with National Multi Commodity Exchange (NMCE) creating the country’s third biggest commodity exchange. NMCE rubber contracts started trading in ICEX post Sebi approval. Volumes and open interest are seen increasing consistently in rubber post the merger.