NEW DELHI, Jan 5: The Indian Commodity Exchange (ICEX), promoted by Reliance Capital and the Indiabulls group, has decided to close down on account of poor performance and may sell the business.
The exchange will not offer any new contracts and expects to close by May, after existing contracts expire.
ICEX is jointly promoted by Reliance Exchangenext, a unit of Reliance Capital, state-owned MMTC and Indiabulls Financial Services, among others. It started in 2009 and offered futures trading in commodities such as precious metals, metals, energy, oils and oilseeds, and minerals on its electronic platform.
“The ICEX management has taken a decision to close down operations of the exchange in view of poor financial returns,” according to an ICEX shareholder. “No new contracts will be launched. We will shut down after phasing out existing ones by May.”
The exchange has also set up a committee to explore strategic alternatives, the shareholder said. The three-member committee will explore options for the exchange, including possible sale or merger with another bourse, the shareholder told reporters.
The shareholder said ICEX’s net worth had eroded by 80 per cent from Rs 100 crore at the start of operations in 2009. Business remained dull due to the imposition of commodity transaction cost and the payment crisis on the National Spot Exchange Ltd.
ICEX, the country’s fourth-largest commodity bourse, after Multi Commodity Exchange of India Ltd, National Commodity & Derivatives Exchange Ltd, and National Multi Commodity Exchange of India Ltd, has conveyed its decision to close to the regulator, the Forward Markets Commission (FMC). An FMC official has confirmed the same.
Reliance Exchangenext and MMTC, the major shareholders, declined to comment on the matter.
Reliance Exchangenext and state-run MMTC each own 26 per cent in ICEX, while Indiabulls Financial Services and Indian Potash Ltd hold 14 per cent and 10 per cent, respectively. Other shareholders include Krishak Bharati Cooperative Ltd (KRIBHCO) and IDFC.
The turnover of the bourse declined 11 per cent to Rs 1.34 lakh crore for the period from January 1 to December 15, 2013, as against Rs 1.49 lakh crore in the same period of the previous year. (AGENCIES)
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