National Commodity & Derivatives Exchange Ltd. Unlisted Shares
National Commodity & Derivatives Exchange Ltd (NCDEX)
Official Name: National Commodity & Derivatives Exchange Limited,
Incorporation Date: April 23, 2003
Commencement of Operations: December 15, 2003
Company Type: Public Limited Company (though referred to as ‘private limited’ in one source, the general consensus and its structure suggest public limited operating as an unlisted entity prior to any IPO), . It is an online, technology-driven commodity exchange.
Headquarters: Mumbai, Maharashtra, India
Branch/Office Locations: NCDEX has offices across India, including centers in Delhi, Ahmedabad, Indore, Hyderabad, Jaipur, and Kolkata to facilitate its members and operations .
Industry: Financial Services, specifically Commodity Exchange
Regulatory Body: Securities and Exchange Board of India (SEBI). SEBI took over the regulation of the commodities market in 2015 from the Forward Market Commission (FMC). NCDEX operations are governed by various laws including the Securities Contracts (Regulation) Act, 1956, Companies Act, and Contract Act, .
Key People (as of recent information):
MD & CEO: Arun Raste
Website: www.ncdex.com
About NCDEX:
National Commodity & Derivatives Exchange Limited (NCDEX) is a premier, professionally managed online multi-commodity exchange in India. It serves as a crucial platform for trading in agricultural commodity derivatives, playing a significant role in India’s agricultural economy. The exchange’s primary objective is to provide a transparent and efficient trading platform for market participants, including farmers, traders, processors, and investors, to manage price risks and engage in price discovery.
NCDEX is committed to best global practices, professionalism, and transparency in its operations. It is a nation-level, technology-driven, demutualized exchange with an independent Board of Directors .
Core Business and Products:
- Primary Focus: Agricultural commodities. NCDEX has a large market share in this segment in India, . It controls around 75-80% of trading related to agricultural items.
- Commodities Traded: NCDEX offers futures contracts on a wide array of agricultural commodities, reportedly up to 23, including many that are economically relevant to India and not widely traded on global platforms. These include:
- Pulses (e.g., Chana)
- Spices (e.g., Turmeric, Jeera, Coriander)
- Guar complex (Guar Seed, Guar Gum)
- Cereals (e.g., Barley, Wheat, Maize)
- Oilseeds (e.g., Soybeans, Mustard Seed)
- Cotton
- Sugar
- Derivatives Instruments: Trading primarily occurs through futures contracts. Options on some agricultural commodities are also offered.
- Clearing and Settlement: The National Commodity Clearing Limited (NCCL), a subsidiary, handles the clearing and settlement of all trades executed on the NCDEX platform. NCCL provides financial compensation in case of defaults .
Promoters and Shareholding Pattern:
NCDEX was initially promoted by a consortium of leading Indian financial institutions . Over time, its shareholding has diversified.
Founding/Original Promoters/Shareholders:
- National Stock Exchange of India (NSE)
- Life Insurance Corporation of India (LIC)
- National Bank for Agriculture and Rural Development (NABARD)
- ICICI Bank (later divested its stake)
- CRISIL Limited (now S&P India)
Current Major Shareholders (as per latest available data from NCDEX website and other sources, percentages may vary slightly over time):
- National Stock Exchange of India Limited (NSE): ~15.00%
- Life Insurance Corporation of India (LIC): ~11.10%
- The National Bank for Agriculture and Rural Development (NABARD): ~11.10%
- Indian Farmers Fertiliser Cooperative Ltd (IFFCO): ~10.00%
- Oman India Joint Investment Fund: ~10.00%
- Punjab National Bank (PNB): ~7.29%
- Canara Bank: ~6.03%
- Investcorp Private Equity Fund I (formerly IDFC Private Equity Fund III): ~5.00%
- Build India Capital Advisors LLP: ~5.00%
- Shree Renuka Sugars Limited: ~5.00%
- CRISIL Limited: ~3.70%
Other shareholders include Jaypee Capital Services Ltd., Star Agriware Housing and Collateral Management Limited, and various individuals.
This diverse shareholding, comprising major public and private sector financial institutions, agri-focused organizations, and investment funds, reflects the strategic importance and broad-based support for NCDEX.
Significance and Benefits to the Indian Economy:
NCDEX plays a vital role in the Indian agricultural ecosystem by:
- Price Discovery: Assisting farmers in accurately pricing their goods, even if they are not active futures market participants.
- Market Transparency: Increasing transparency in the agricultural markets through its online platform.
- Risk Management: Enabling farmers, traders, and other stakeholders to hedge against price volatility .
- Reducing Middlemen Influence: Providing direct access to price information, thereby reducing the reliance on commission agents and associated costs for farmers.
- Improving Agricultural Practices: Standardizing quality specifications through contracts, which has raised quality awareness among farmers and encouraged better farming practices, .
- Facilitating Trade and Exports: As India’s agricultural productivity and exports grow, NCDEX provides essential tools for managing associated risks.
- Digitizing Agri-Commodity Storage: Through its associate/subsidiary NERL (National E-Repository Ltd), it facilitates electronic Negotiable Warehouse Receipts (eNWRs) .
Operational Scale (data as of varying dates):
- Registered Members: As of July 2013, NCDEX had 848 registered members . Another source mentions 387 members as of March 2019 .
- Client Base: Around 20 Lakhs (2 million) as of July 2013 .
- Trading Terminals: Over 49,000 terminals across 1,000 centers in India (as of July 2013) .
- Warehousing Network: Facilitates deliveries through a network of over 594 accredited warehouses with a significant holding capacity (e.g., around 1.5 million tonnes as of July 2013) .
Recent Financial Performance Insights (FY25 as per one source):
- Reported Profit: A LinkedIn article mentioned a reported profit of ₹234 crore in FY25, largely attributed to non-recurring exceptional income from divestments, not core trading operations .
- Revenue from Operations: For FY25, revenue from operations was reported at ₹122 crore, down from ₹136 crore in FY24, indicating ongoing challenges in core trading revenues .
- Key Divestments in FY25: Stakes in NERL (National E-Repository Ltd) and PXIL (Power Exchange India Ltd) were divested, contributing significantly to the reported profit .
IPO Aspirations:
NCDEX has, in the past, received approval from SEBI for an Initial Public Offering (IPO) . The issue size was reported to be around Rs. 500 crore . However, the actual launch and timing of an IPO are subject to market conditions and company decisions.
Frequently Asked Questions (FAQs) – NCDEX Unlisted Shares
What is NCDEX?
The National Commodity & Derivatives Exchange Limited (NCDEX) is a leading online multi-commodity exchange in India. It provides a platform for trading in various agricultural and other commodities, facilitating price discovery and risk management for participants in the agricultural sector.
Why should I consider investing in NCDEX unlisted shares?
Investing in NCDEX unlisted shares offers the potential to be part of a key institution in India’s agricultural economy before a possible public listing (IPO). Benefits include its strong institutional backing, market leadership in agri-derivatives, and potential for significant returns if the company grows and lists successfully.
Are NCDEX unlisted shares held in physical form or Demat form?
NCDEX unlisted shares, like most unlisted shares today, are held in Dematerialized (Demat) form . This ensures security and allows for easier transfer and management of your holdings.
How can I buy or sell NCDEX unlisted shares?
You can buy or sell NCDEX unlisted shares through specialized brokers and platforms like UnlistedShareBrokers.com. The process typically involves KYC documentation, price agreement, fund transfer (for buyers) or share transfer from your Demat account (for sellers), and final settlement into your Demat or bank account respectively .
What are the risks involved in investing in NCDEX unlisted shares?
Key risks include lower liquidity compared to listed shares, potential price volatility, limited publicly available information, regulatory changes, and no guarantee of a future IPO or its success . Company-specific business risks related to the agricultural sector also apply .
Is trading in NCDEX unlisted shares legal in India?
Yes, buying and selling unlisted shares, including those of NCDEX, is legal in India . Transactions are typically conducted over-the-counter through intermediaries.
What is the minimum investment or lot size for NCDEX unlisted shares?
The minimum lot size for NCDEX unlisted shares can vary. Some platforms suggest lot sizes like 100 shares . Please contact UnlistedShareBrokers.com for the most current information on minimum investment requirements.
Is there a lock-in period for NCDEX unlisted shares?
Generally, there isn’t a lock-in period for buying or selling NCDEX unlisted shares themselves before an IPO. However, if NCDEX were to launch an IPO and you hold pre-IPO shares, those specific shares would typically have a mandatory lock-in period of six months from the date of IPO allotment .
How are capital gains from NCDEX unlisted shares taxed?
Capital gains from selling unlisted shares are taxed based on the holding period. If held for more than 24 months, Long-Term Capital Gains (LTCG) tax applies (e.g., 20% with indexation benefits, or a different rate without, as per prevailing tax laws) . If sold within 24 months, Short-Term Capital Gains (STCG) are taxed at your applicable income tax slab rate . Tax laws can change, so it’s best to consult a tax advisor.
Can Non-Resident Indians (NRIs) invest in NCDEX unlisted shares?
Yes, NRIs can invest in unlisted shares in India, including NCDEX, subject to compliance with FEMA (Foreign Exchange Management Act) regulations. Typically, investments are made through NRO (Non-Resident Ordinary) accounts, and the shares are credited to an NRO Demat account.
