Mumbai: Leading banking and financial services groups including ICICI, IL&FS and Kotak have picked up around 9.55% stake in India’s largest commodity derivatives exchange, Multi Commodity Exchange of India Limited (MCX).

IL&FS, ICICI and Kotak has purchased 5%, 3.55%, 1%
equity stake respectively in MCX for around USD 1.1 billion. The recent deal
has reduced Financial Technologies’s (FT), MCX parent firm, holding in MCX to
37.5%.

Jignesh Shah, CEO and Managing Director, MCX said, “We are currently not looking at any further dilution of stake. The equity from the current stake sale will be deployed in improving the exchange infrastructure.”

KV Kamath, ICICI Bank CEO said, “It is the bank’s philosophy to partner with growth-oriented companies which seek to leverage technology and the power of markets for economic transformation.”

MCX, headquartered in Mumbai, has commenced operations in November 2003, and controls around 70% market share for the quarter ended June 30, 2007.
It provides futures trading in 56 commodities, and some of them include bullion, energy, ferrous and non-ferrous metals, oil and oilseeds, cereals, pulses, plantations, spices, plastics and fibres.

Presently, FID Fund (Mauritus), an affiliate of Fidelity International, holds 9% stake in MCX, Passport India Investment (Mauritius) has 3% stake and GLG Financials Fund has another 2% stake. Other MCX stakeholders are HDFC Bank, SBI and its associates and other public sector banks.

Commodity exchanges are currently looking for concluding guidelines on foreign holding.

While lecturing on the investment, Kotak Mahindra Bank vice-chairman & MD Uday Kotak said, “Over the past few years, the commodities futures market in India has experienced an unprecedented growth in terms of the number of modern exchanges, commodities allowed for derivatives trading and the value of futures traded. MCX has demonstrated leadership by creating a scalable and technologically-sound commodities trading exchange.”