IDFC Alternatives buys stake in India commodities exchange
IDFC Alternatives has acquired a 5% stake in National Commodity and Derivatives Exchange (NCDEX), India’s largest agricultural commodity derivatives exchange, from Jaypee Financial Services for INR456 million ($7.3 million).
Delhi-based brokerage Jaypee reduced its stake in NCDEX from 22.38% to 7.68%. NCDEX's most recent shareholding pattern indicates that IDFC Private Equity Fund III, Oman India Joint Investment Fund and Build India Capital Advisors were the buyers. Jaypee invested in the company in 2010.
NCDEX claims a more than 70% share of India's agricultural commodity market based on average daily trade value. It has more than 700 accredited warehouses nationwide with a capacity of 2.6 million metric tons to handle delivery and trading of commodities.
The exchange's promoter shareholders are ICICI Bank, Life Insurance Corporation of India, the National Bank for Agriculture and Rural Development and the National Stock Exchange of India.
Satish Mandhana, managing partner and CIO at IDFC Alternatives, said the investment was a continuation of the group's focus on agricultural and rural assets, noting that supporting financial-cum-physical infrastructure for the rural economy brings good portfolio balance.
"As exchange traded agri-commodities in India are well below international benchmarks, we see significant growth opportunity for NCDEX," he added.
IDFC's existing investments in the food and agriculture space include Staragri Warehousing and Collateral Management, which provides warehousing and agri-commodities procurement and collateral management services, and dairy firm Parag Milk Foods.
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