R-Money may have to pay more for NMCE stake: report

Reliance Money's plan to acquire an additional 16 per cent stake in the country's first major commodity exchange, the Ahmedabad-based National Multi-Commodity Exchange (NMCE), has reportedly hit a roadblock over valuation.

The Anil Ambani-controlled Reliance Money, a securities brokerage and distribution company, had acquired a 10 per cent stake in NMCE last October for Rs10 crore, putting a value of Rs100 crore for the bourse. The Forward Markets Commission, the commodities market regulator, had approved the deal with potential for a 16 per cent additional equity holding.

According to the agreement, R-Money could acquire an additional 16 per cent stake in the commodity bourse within six months at an earlier negotiated price. Since the six-month stipulated period has ended in March, the Reliance Money would have to pay on the basis of mutually agreed valuations of Rs300-350 crore, Business Standard reports.

The exchange's turnover, which is the only factor for determining valuation of any exchange, has increased over 142 per cent during the last fiscal year to Rs122,649.42 crore, against Rs50,761.41 crore in the previous year. Additionally, the bourse has maintained its leading position in trading in spices, rubber, etc. "The valuation must increase and any fresh dilution of stocks should be at par with the current valuation of the exchange," said Kailash Gupta, founder and managing director of NMCE.

However, Sudip Bandopadhyay, director and chief executive of Reliance Money, said, "We have neither made any attempt to buy an additional stake nor do we have any such plan in the near future."

Meanwhile, NMCE is planning to raise Rs50-60 crore from foreign investors in 2009 to fund its expansion plans. "Our merchant bankers are talking to probable foreign investors in this regard," Gupta said on the sidelines of a press conference.