BSE SME Exchange to launch separate index

“We have already decided to set up a SME index within six months after launch of the SME Exchange,” CEO of BSE SME Exchange L Gugolothu said

BSE SME Exchange, a part of Bombay Stock Exchange (BSE), would launch a separate index specifically for small and medium companies, an official of the bourse said on Wednesday.

"We have already decided to set up a SME index within six months after launch of the SME Exchange," CEO of BSE SME Exchange L Gugolothu told reporters.

He said that SME Exchange was expected to be launched by September.

Replying to a query, he said that there are 4,000 BSE-listed companies having a paid-up capital of up to Rs25 crore.

Gugolothu said that BSE SME Exchange would target these companies for switching over, for which they are not further required to go for a fresh issue.
"They will only have to comply with the listing norms of the SME exchange," he said.

He said that listing fees is 50% of BSE and companies are not required for announcing quarterly results but go for half-yearly disclosures only.
Illiquid scrips on BSE could opt for the SME entity to bring in liquidity of the scrips, he stated.

Once a critical mass was obtained, the division would be spin off as a separate entity, he said.

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Allow up to 49% FDI in multi-brand retail: Consumer affairs ministry

On the other hand, the Department of Industrial Policy and Promotion, which is piloting the proposal for the politically sensitive sector, is in favour of a majority stake (51%) for foreign retail chains, with set-up conditionalities

New Delhi: Amid a debate within the government on allowing foreign direct investment (FDI) in multi-brand retail, the nodal consumer affairs ministry is insisting on a FDI cap of 49% in the sensitive sector, reports PTI.

"Starting with 49% FDI in the sector would be a safe thing," a senior consumer affairs ministry official told PTI.

However, the Department of Industrial Policy and Promotion (DIPP), which is piloting the proposal for the politically sensitive sector, is in favour of a majority stake (51%) for foreign retail chains, with set-up conditionalities.

Prime minister Manmohan Singh, in his interaction with editors yesterday, said there is a "big debate about it" in the government and Parliament.

"There is fear of small traders, but without breaking such institutional barriers, there is fear of food inflation.

I am hoping we can make a beginning in these areas. These are some of the ideas that are uppermost in my mind," Mr Singh said.

The other big area of inter-ministerial differences relate to the minimum limit set for investment.

Of the $100 million (about Rs450-Rs460 crore) minimum investment proposed by the DIPP, at least 50% has to be earmarked for back-end infrastructure like cold storage, soil testing labs and seed farming.

However, the consumer affairs ministry wants a larger share of 75% of multi-brand retail FDI to be invested in back-end supply chains.

"As India's back-end infrastructure is weak, the foreign investor should invest at least 75% of the $100 million in it," the official said.

While the DIPP has floated another discussion paper on the subject, a committee of secretaries is going through the issue and is expected to meet again soon.

The industry ministry has also proposed that multi-brand retail giants like Wal-Mart, Carrefour and Tesco may be allowed only in the 36 large cities which have population of over 1 million, according to the 2001 census.

Retail giants like US-based Wal-Mart and French Carrefour are very keen to enter the segment.

Bharti Enterprises and Wal-Mart Stores entered into a joint venture in August 2007, and started cash-and-carry stores named 'BestPrice Modern Wholesale' in 2009.

At present, 51% FDI is permitted in single brand retail, while 100% is allowed in the wholesale cash-and-carry segment.

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NSE seeks another 3-month extension for stake sale in NCDEX

Presently NSE holds 11.1% stake in NCDEX. Under the new guidelines for commodity bourses that have completed a five-year term, a stock exchange cannot hold more than 5% stake in a commodity bourse

New Delhi: National Stock Exchange (NSE) has again approached the consumer affairs ministry to seek extension of three months to dilute its stake in the commodity bourse National Commodities and Derivatives Exchange (NCDEX) to 5%, reports PTI.

The deadline for dilution of the stake is expiring today.

NSE had earlier got a three-month extension from the ministry in April.

At present, NSE has 11.1% stake in NCDEX. Under the new guidelines for commodity bourses that have completed a five-year term, a stock exchange cannot hold more than 5% stake in a commodity bourse.

"NSE has sought further extension of three months for stake dilution in NCDEX and we are considering it," a senior consumer ministry official said.

NSE has contended that it is in advance stage of talks with a domestic company and a Qatar-based firm for dilution of stake in NCDEX, the official said, adding the exchange has sought extension as it would take more time to get regulatory approvals required for completion of the deal.

The stock exchange plans to sell 5% stake to the overseas firm and the rest 1.1% to the domestic entity, the official said.

The consumer affairs ministry frames policies for the commodity futures market and the regulator Forward Market Commission (FMC) oversees the functioning of the 23 commodity exchanges in the country.

Earlier this year, NCDEX had roped in Jaypee Capital Services and Shree Renuka Sugars to enhance their networth to Rs50 crore as required by the new norms.

Jaypee Capital holds 22.38% stake in NCDEX, while Shree Renuka Sugars has 12.50% stake in the country's second largest commodity bourse. LIC, IFFCO and NABARD are among other major shareholders in the exchange.

Sources said that NSE has already signed the term sheet to sell 6.1% of stake in NCDEX to meet the revised FMC guidelines and has sought extension of three months to complete the formalities.

The deal for share sale would need approvals from the government's FDI clearance body Foreign Investment Promotion Board (FIPB), Reserve Bank of India (RBI) and FMC.

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