Sebi has allowed mutual funds and portfolio management services (PMS) to trade in commodity derivatives. This is likely to boost turnover of Indian Commodity Exchange (ICEX). Rival MCX expects 15-20% volume growth to be maintained with entry of MFs and PMS in FY20.
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Sanjit Prasad, CEO, Indian Commodity Exchange (ICEX), said adding commodities in investors’ portfolios involves some risk but the overall risk adjusted returns of the portfolio may improve. “The ICEX platform will enable them to participate in unique commodities such as diamonds where we have seen a healthy growth in terms of participation and open interest,” he said.
Sebi allows MFs, PMS to invest in commodity derivatives
MSTC Limited, a Mini Ratna works under Ministry of Steel, has filed the draft red herring prospectus with market regulator Securities and Exchange Board of India (Sebi) on January 31 for the public issue.
The Government of India will dilute its stake in the company by selling 1.76 crore equity shares (representing 25% of total paid-up equity) through offer for sale.
MSTC (earlier Metal & Scrap Trading Corporation) is engaged in providing e-commerce related services across diversified industry segment offering e-auction/e-sale, e-procurement services and development of customized software/solutions and also is a major player in trading of bulk raw material.
Studds Accessories has received market regulator Sebi’s approval to float an initial public offer (IPO). Studds Accessories is the leading manufacturers and exporters of Helmets & two wheeler accessories in India. Product range includes Two Wheeler Accessories. Studds has a strong global presence with partners in over 35 countries.
The company had filed its draft papers with the markets regulator in August seeking its clearance for the initial public offer (IPO). Studds Accessories’ IPO comprises fresh issuance of shares worth Rs 98 crore besides an offer for sale of 39.39 lakh equity shares by promoters Madhu Bhushan Khurana and Sidhartha Bhushan Khurana, and other existing shareholders.
Proceeds of the issue will be used to part-finance the motorcycle helmet, two-wheeler accessories, bicycle helmet manufacturing facilities in Faridabad, and for general corporate purposes. Edelweiss Financial Services and IIFL Holdings will manage the company’s public issue.
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.
The Securities and Exchange Board of India (Sebi) and the Ministry of corporate affairs is considering making dematerialisation (demat) of shares mandatory for all unlisted companies. While listed firms are required to maintain shares in dematerialised form, there is no such specific requirement in the case of unlisted entities — both public and private.
Sebi rules require all listed companies to dematerialise shares. About 70,000 public limited companies are unlisted and more than 1 million private limited companies are registered with the corporate affairs ministry.
An unlisted public company is one which has more than 50 shareholders, a higher minimum capital requirement of Rs5 lakh and needs to comply with statutory requirements such as holding meeting with shareholders and capping director remuneration.
A meeting of the depositories National Securities Depository Ltd and Central Depository Services Ltd on 12 September 2017 to gauge their preparedness and the transition requirements to meet the proposal. Considering the number of companies and shares, it could be a massive exercise.
The move will bring down the number of frauds relating to dividend payouts and equity shares. In the absence of 100% demat of securities of listed or unlisted public companies, fundamentally weak companies can always issue duplicate shares to their promoters/persons, which can be pledged with different financiers to get funding.
Dematerialisation, or demat, is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and is aimed at eliminating fraud and theft while making trades trackable. India embarked on the process in 1996 and almost all shares of listed companies are held in the demat form. India has about 6,000 listed companies.