The National Commodity and Derivatives Exchange (NCDEX) is taking a new direction with a clear goal: to achieve break-even by securing just 1% of India’s equity market share while continuing its strong position in agricultural commodities. This move marks a major shift for India’s leading agri-commodity exchange as it prepares to enter the equity and equity derivatives market.
The Road to Break-Even
For years, NCDEX has held a dominant position in agricultural commodity trading, controlling nearly 97% of India’s agri-derivatives market. Despite this leadership, the exchange has faced financial challenges due to unpredictable factors such as weather changes, global conflicts, and frequent government restrictions on trading essential crops. These disruptions have significantly affected revenue, causing about 70% of its operations to shrink in recent years.
To overcome these hurdles, NCDEX is stepping into the equity market, a much broader and more stable segment. According to CEO Arun Raste, this is not only a diversification strategy but also a path to financial recovery. “Even with 1% of equity market share and commodities, we would be breaking even,” he said, highlighting the company’s focus on building sustainable growth through balanced operations.
Why Equities?
Raste explained that agricultural commodities often face unpredictable swings due to external factors, making stable profits difficult. The equity market, on the other hand, offers larger participation and steady growth opportunities. NCDEX plans to use its existing rural and small-town network, built through years of work with farmers and cooperatives, to bring new investors into the equity space. This approach gives the exchange a unique edge, helping connect smaller towns to financial markets that have mostly been dominated by big-city exchanges like NSE and BSE.
Funding and Expansion
To support its expansion, NCDEX has raised ₹770 crore from a mix of domestic and global investors. The funds will be used for technology upgrades, improving trading systems, and building teams dedicated to the new equity business.
The exchange currently has around 235 employees and plans to increase its workforce by about 50% in the coming year. It will create new roles in listing, compliance, and investor support while expanding its offices and investor centres across the country.
Preparing for SEBI’s Final Approval
The Securities and Exchange Board of India (SEBI) has already given in-principle approval for NCDEX to start its equity operations, with final clearance expected soon. The exchange is now focused on strengthening its technology infrastructure, risk management systems, and overall operational framework before launch.
Once approved, NCDEX plans to roll out its equity trading platform in 2026, making it India’s first exchange to bring agriculture and equities together on one platform.
The Larger Vision
NCDEX’s entry into equities is not just a business expansion; it represents a larger shift in how India’s exchange ecosystem is evolving. By combining its strong agricultural foundation with new opportunities in equities, NCDEX aims to build a balanced and profitable business model.
If executed well, this move could help NCDEX Unlisted Shares achieve consistent profitability while giving rural India better access to financial markets. As Arun Raste puts it, “With 1% of equity market share and commodities, NCDEX can stand on its own feet.”
