The merger has been approved by the Boards of both exchanges.
“The proposed merger will create India’s third largest commodity exchange, offering a wide range of contracts including bullion, oil, rubber and other agri-commodities,” NMCE and ICEX said in a joint statement here.
The exchange would also offer the world’s first diamond futures contract, that has already received ‘in-principle’ approval from the regulator, it said.
“The merger will result into greater financial strength, consolidation of clients and members, enhanced product basket and higher operational synergies, helping ICEX to further strengthen its position in the fast growing commodity derivatives market in India, Sanjit Prasad, MD and CEO, ICEX, said.
“The large base of warehousing facilities of Central Warehousing Corporation (CWC) with storage capacity of 9.89 million tonnes, will become available to the combined entity pan India, which will help generate more liquidity due to wider participation of the larger base of active members of the combined entity,” Anil Mishra, MD and CEO, NMCE, said.
As per the agreed swap ratio, ICEX shareholders will hold 62.8 per cent stake and NMCE shareholders will hold 37.2 per cent stake in ICEX, post merger.
“The merged entity will have prominent shareholders from both exchanges including MMTC, Indian Potash, Krishak Bharti Cooperative (Kribhco), IDFC Bank, Indiabulls Housing Finance, Reliance Capital, Bajaj Holdings, Central Warehousing Corporation, Punjab National Bank and Gujarat Agro Industries,” it said.
The merger was expected to be completed by December, subject to regulatory approvals