UPDATE 1-Anil Ambani eyes stake in Indian commodity bourse

* Ambani group plans to get stake in ICEX – regulator

* Jaypee Capital wants 26 pct stake in NCDEX – regulator

* Sign of growing corporate interest in Indian exchanges

(Recasts, adds analyst comment, background)

By Sourav Mishra

MUMBAI, Aug 18 (BestGrowthStock) – Indian billionaire Anil Ambani
plans to get shares in a local commodities exchange, signalling
growing corporate interest in bourses where Goldman Sachs (GS.N: )
and IntercontinentalExchange (ICE.N: ) have bought small stakes.

Reliance Anil Dhirubhai Ambani Group (R-ADAG) plans to buy a
stake in the Indian Commodity Exchange (ICEX), a leading bourse
for metals including gold, the market regulator, whose approval
is needed for selling stakes in bourses, said on Wednesday.

Jaypee Capital wants to acquire 26 percent in the National
Commodity and Derivatives Exchange (NCDEX), the regulator added.

R-ADAG’s Reliance Money, a unit of Reliance Capital
(RLCP.BO: ), will buy the stake from Indiabulls Financial Services
Ltd (IBUL.BO: ), which owns 40 percent of ICEX, two sources at
Indiabulls said.

ICEX was founded last year by state-run metals and farm
commodities trader MMTC Ltd (MMTC.BO: ).

B.C Khatua, chairman of the Forward Markets Commission that
regulates commodities exchanges, confirmed there was a proposal
to sell equity to Reliance Money but he did not say how big of a
stake it would be.

The Business Standard paper had reported Ambani wanted 26
percent of ICEX.

“Yes Indiabulls has approached us… They want to surrender
their anchor-investor status to Reliance Money,” Khatua said.

He also said the regulator was considering a proposal from
Jaypee Capital Services to acquire 26 percent anchor investor
stake in NCDEX.

Analysts said the entry of large business groups such as
R-ADAG would help boost turnover on exchanges.

“Investors are expecting valuations to go up if there are
reforms in this sector. The entry of players like Reliance will
drive up trading volumes,” said Gnanasekar Thiagarajan, director
at Commtrendz Research.

India has four national commodity bourses — National
Commodity and Derivatives Exchange (NCDEX), Multi-Commodity
Exchange (MCX), National Multi-Commodity Exchange, and ICEX.

A fifth bourse — ACE Derivatives and Commodity Exchange,
promoted by Kotak Mahindra Bank (KTKM.BO: ) — won national
commodity exchange status last week and starts up in a month.

India, which allowed futures trading in commodities in 2003,
has one of the fastest-growing commodity futures markets and had
a combined turnover of 77.65 trillion Indian rupees ($1,667
billion) in the 2009/10 fiscal year ending in March.

Growing turnover has attracted several investors such as
Goldman Sachs, which bought a 4 percent stake in NCDEX through a
Mauritius-based investment arm. InterContinentalExchange also
holds a 4 percent stake in the same exchange.

NYSE Euronext (NYX.N: ), Fidelity International [FIDLI.UL],
Aginyx Enterprises, Intel Capital, and Passport India
Investments own stakes in rival MCX, India’s biggest commodities
exchange.

Foreign investors are allowed to hold up to 5 percent equity
stakes in local commodities exchanges.
(Writing by Himangshu Watts; Editing by Michael Shields)

UPDATE 1-Anil Ambani eyes stake in Indian commodity bourse