Commodity bourse ICEX plans rights issue as part of revival plan

MUMBAI: Commodity bourse Indian Commodity Exchange (Icex), promoted by Reliance Capital and MMTC, is considering a rights issue as part of a plan to revive the exchange which suspended operations in April last year after sustained losses, two people with knowledge of the plan told ET. The size of the issue and whether the promoters would underwrite it are not known. The boards of the shareholding companies of ICEX would have to approve their participation in the proposed rights issue, the people added.

A spokesperson for Anil Ambani’s Reliance Group, which controls Reliance Capital, didn’t respond to a query on the matter. The exchange had in November submitted a revival plan to commodity market regulator Forward Markets Commission (FMC).

Shareholders of ICEX include Reliance Exchange Next, a whollyowned subsidiary of Reliance Capital that holds 26%, and MMTC, with another 26%. Other shareholders include the bourse’s co-founder Indiabulls (14%), Indian Potash (10%), Kribhco (5%) and IDFC (5%). ICEX had a net worth of Rs 36.5 crore in the fiscal year through March 2012. This is well below the Rs 100-crore minimum networth that the FMC has stipulated for national exchanges.

The exchange began operations five years ago but could not gain the required traction given stiff competition from rival bourses like MCX and NCDEX.

The imposition of a transaction tax on nonfarm commodities in July 2013 and the scandal at the National Spot Exchange, another commodity bourse, further affected the prospects of exchanges such as ICEX and Kotak Group-anchored Ace, which began post 2008

ICEX posted a loss of Rs 31.2 crore in fiscal 2011 and Rs 25.6 crore in the following year.