Nidhi Nath Srinivas, TNN Dec 5, 2006, 02.42am IST

NEW DELHI: ICICI may be seeking a buyer for its 8% stake in NCDEX, India’s largest commodity on-line exchange, to encash the boom in derivatives trading. Out of its total 15% stake, the financial institution has already offloaded 7% stake to Goldman Sachs.

Foreign banks and overseas exchanges such as the Intercontinental Exchange, are keenly waiting for investment opportunities in Indian exchanges because of the huge business potential that lies ahead. India’s commodity derivatives trading is expected to cross Rs 30 lakh crore this fiscal.

ICICI has told us informally that they may offload their shareholding in NCDEX if they get a suitable opportunity. Their sale of 7% share fetched them Rs 108 crore on an investment of Rs 2.5 crore.

So, if an equally good opportunity arises, they may well sell. However, they have not yet finalised a buyer to the best of my knowledge, said PH Ravikumar, chairman and managing director of the exchange. The market has been agog with rumours over the weekend that ICICI has already struck a deal for NCDEX shares.

ICICI will have to take prior approval from NCDEX before seeling the stake. Under the terms of investment, they have to seek our okay before going ahead with any deal. Moreover, existing shareholders will have first right of refusal. Till now, ICICI has not approached us with a name, he added.

At the time of the Goldman Sachs deal, though ICICI had offered its stake to existing NCDEX shareholders, they were reluctant to shell out a price of Rs 508 per share, which was being offered by Goldman Sachs. Currently, the market expects ICICI to easily get more than Rs 620 a share.

The Indian policy is not clear on how much stake foreign institutions can pick up in Indian bourses. Consequently, whenever any foreign investor is offered stake, it is always accompanied by a caveat that they may have to offload some stake in case the government puts a lower cap on FDI.

Market watchers say if a foreign exchange picks up stake in NCDEX, it would be a vote of confidence for the potential of Indian commodity derivative trading. ICICI Bank, LIC, NABARD, and the National Stock Exchange each own 15% of the commodity exchange. NCDEX is the only commodity exchange in the country promoted by national level institutions.