Mumbai: Multi-Commodity Exchange (MCX) today said it will seek Reserve Bank's permission to hike foreign holding from 23 per cent to 49 per cent.
The FII/FDI cap in the sector is currently capped at 49 per cent. At present, FIIs hold 23 per cent in the exchange while foreign corporate bodies hold 10.5 per cent, taking the overall foreign holding to 33.5 per cent in the country's only listed commodities exchange.
“After an enabling resolution of fungibility of increasing foreign investment passed today at the AGM, we will seek the RBI approval and are hopeful that the regulator will clear out application to raise stake,” MCX acting—chairman RM Premkumar told reporters on the sidelines of the company's 11th annual general meeting here.
“We see great opportunities in FII hiking stake in the company,” Premkumar added.
The exchange intends to make a sub—limit of 23 per cent interchangeable with 26 per cent FDI for secondary market compliance under the portfolio investment scheme.
The move is significant as recently the government relaxed norms for foreign direct investment in commodity exchanges where commodity exchanges need not seek government approval for up to 49 per cent ownership by foreign investors.
Meanwhile, the MCX AGM turned out to be a low key affair as protesters kept themselves away due to heavy police security.
Commenting on recent fall in share price of MCX, Premkumar said the company has no plans to buyback shares.
The share price has fallen sharply owing to payment crisis in the group company the National Spot Exchange (NSEL).
“The zero—debt MCX has strong fundamentals and has 87 per cent market share. The share price has come down due to falling volume due to CTT levied in July this year and unfortunate public perception of any perceived linkage with NSEL,” he said.
Premkumar, who is the regulator FMC—nominated acting chairman, clarified that there is absolutely no linkages, financial or otherwise with NSEL, which is totally different company.
“MCX risk management is very much in place and evaluated by EY. We see no crisis as the exchange security systems are audited on continuous basis, whether it is collateral or fixed deposits etc,” he said.
Asked on the recent reconstitution of the MCX board, he said it is evaluated and regulated by FMC.
