NCDEX gets SEBI go-ahead for Rs 500-cr IPO

Agricultural commodity bourse, National Commodity and Derivatives Exchange Ltd (NCDEX), has received capital market regulator Sebi's approval to launch the Rs 500-crore initial public offer (IPO). The offering 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 (DRHP).

In an update on April 10, the regulator has given “observations” to NCDEX's IPO on April 9.

Sebi's observations are mandatory for any company to launch public issues like initial share-sale, follow-on public offer (FPO) and rights issue.

The company had approached the Securities and Exchange Board of India (Sebi) with its IPO papers in February.

Also read: NCDEX files DRHP for Rs 500 crore IPO; third bourse to hit D-Street

After BSE and MCX, this would be the third listing by an exchange.

The public issue is expected to raise about Rs 500 crore, including from the fresh offering of shares, merchant banking sources said.

Build India Capital Advisors LLP, Canara Bank, Indian Farmers Fertiliser Cooperative, Investcorp Private Equity Fund I are among the selling shareholders.

Besides, Jaypee Capital Services, National Bank for Agriculture and Rural Development, Oman India Joint Investment Fund and Punjab National Bank will also sell their stakes.

Last month, the regulator had sought clarification from the merchant banker of NCDEX regarding its proposed IPO.

The National Stock Exchange (NSE) holds 15 percent stake in the agricultural commodity exchange, while Life Insurance Corporation of India (LIC) and NABARD have 11.10 percent each. IFFCO has 10 per cent, Oman India Joint Investment Fund 10 per cent and Punjab National Bank 7.29 per cent, 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 shares are proposed to be listed on the BSE and NSE.

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.