NCDEX to launch mutual funds, equities and derivatives by next year

National Commodity and Derivatives Exchange (NCDEX) is preparing to expand beyond commodities with new offerings in mutual funds, equities and equity derivatives. The move comes after the exchange raised around ₹770 crore through a preferential share issue from domestic and global investors.

Arun Raste, MD & CEO of NCDEX, said the funds will be used to establish its presence in capital markets. “We will primarily use it for equity and equity derivative segment,” he said.

The exchange already holds the required market regulator approvals and is now focused on rollout timelines.

Raste confirmed that the first product to launch will be a mutual fund distribution platform, as it does not depend on their core trading and surveillance systems. “That will be our first offering… very early, possibly the beginning of the next financial year,” he said. Equities will follow, and equity derivatives will be introduced once systems stabilise.

He expects all three segments to be operational by next calendar year or latest by next financial year.

NCDEX is also targeting international growth opportunities.

Raste said the exchange plans to take about 20% stake in a proposed new commodities and derivatives exchange in Sri Lanka, in partnership with the Colombo Stock Exchange. The move is pending approvals in both countries. NCDEX aims to provide operational expertise and training to the new platform. “We will be operating that for some time,” he said.

To execute these new businesses, NCDEX plans to hire around 150 people over the next 12 months and is finalising technology vendors for both the mutual fund platform and the equity trading system. “We are working on all the three fronts,” Raste said, referring to technology, manpower and market participation.

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On competing with BSE and NSE, Raste highlighted the strong growth potential in India’s investment ecosystem. He pointed out that mutual fund participation has grown from about 50 lakh investors 15 years ago to more than five crore today. “This growth will continue,” he said, adding that India has only about 15% population involved in equities and mutual funds compared with 50% in markets like the US and UK.

Raste said NCDEX will focus on underserved markets beyond major cities. The exchange already works closely with farmers and rural participants. He shared an example of a farmer investing ₹250 a month in systematic investment plans (SIPs) and said exchange participation can help such investors “benefit from day one.”

He believes the market size is expanding fast enough to support another major exchange. “There is space for everybody,” he said, adding that India has room for three or more exchanges as financial participation spreads.

For the full interview, watch the accompanying video

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