SEBI Seeks Clarification On NCDEX Initial Public Offering

Capital markets regulator Securities and Exchange Board of India has sought clarifications from merchant bankers of the proposed initial public offering of National Commodity and Derivatives Exchange Ltd., which last month filed draft papers to raise an estimated Rs 500 crore.

The IPO comprises a fresh issue aggregating up to Rs 100 crore and an offer for sale of up to 1.44 crore shares, according to the draft red herring prospectus. In an update on March 13, the regulator said it is awaiting a response to the clarification sought on March 12 from the lead manager of the public issue.

However, details of the clarification sought for the IPO could not be immediately ascertained. The public issue is expected to raise about Rs 500 crore, including from the fresh offering of shares, merchant banking sources said. After BSE and MCX, this would be the third listing by an exchange.

Build India Capital Advisors LLP, Canara Bank, Indian Farmers Fertiliser Cooperative, Investcorp Private Equity Fund I are among the selling shareholders. Jaypee Capital Services, National Bank for Agriculture and Rural Development, Oman India Joint Investment Fund and Punjab National Bank will also sell their stakes.

Some of the key investors in NCDEX include National Stock Exchange of India, Life Insurance Corporation of India and National Bank for Agriculture and Rural Development. Indian Farmers Fertiliser Co-operative, Oman India Joint Investment Fund (OIJIF), Punjab National Bank, Canara Bank, Build India Capital Advisors LLP, and Investcorp Private Equity Fund I also have stakes in the exchange.

The National Stock Exchange holds a 15 percent stake in the leading agricultural commodity exchange, while LIC and NABARD have 11.10 percent each, IFFCO 10 percent, OIJIF 10 percent and Punjab National Bank 7.29 percent, among others, according the DRHP.

NCDEX has proposed to utilise the net proceeds towards contribution to the core settlement guarantee fund, net worth requirements of National Commodity Clearing Limited and general corporate purposes, as per the document. The book running lead managers to the offer are ICICI Securities and SBI Capital Markets. ICICI Securities is the coordinating lead manager for the issue.

The exchange offers services across the entire post-harvest agricultural commodities value chain by utilising a varied presence, which has enabled it to create a wide network of stakeholders and market participants. It also engages in research, training and building awareness in agricultural commodities market through NCDEX Institute of Commodity Markets and Research. The shares are proposed to be listed on the BSE and NSE.