Ambani bullish on commodity trading
There is a robust growth potential for commodity trading business in India as high growth segments like bullion, power, realty and diamond are yet to be tapped to their full potential, a top ADAG official said.
"Commodity trading in the country is by far an unexplored territory as it is limited to large traders and insignificant retail participation. India can gain large economic traction if it capitalises on the commodity trading business," Reliance Capital's brokerage and financial products distribution arm Reliance Money's CEO Sudeep Bandyopadhyay said.
So far commodity trading is mostly limited to segments like metal and agri commodities and there also the business is limited to select group of traders. While retail investors participation is very less, institutional investors presence is not there at all, he added.
Anil Ambani group is believed to be planning to enter the commodity business for which it is talking to various potential partners for strategic technological and infrastructural support.
Sources said, the Anil Dhirubhai Ambani Group (ADAG) may announce the launch of a bullion exchange in a day or two in partnership with Bombay Stock Exchange (BSE) and Bombay Bullion Association (BBA) and a national commodity exchange as part of its plans to capitalise on the vast opportunities in this market.
When asked about commodity exchange business plans Bandyopadhyay said, "We are open to any opportunity." However, he did not give further details.
ADAG is present across diversified businesses such as telecom, power, financial services, energy, infrastructure and media. Besides, the group is already present in the commodity brokerage business through Reliance Money. According to experts, this market could be in for a major overhaul with some large corporate houses waiting to start their own bourses.
Another emerging conglomerate Indiabulls group, which is present in businesses like brokerage, financial services, real estate, retail and power has already tied up with state-run trading firm MMTC to start a commodity exchange, for which it is awaiting necessary approvals.
Bandyopadhyay believes, there is a huge growth potential in the Indian commodity market, which is already of the size of close to one trillion dollars and could gain further scale given a continuing bull run across the world in this segment for over five years now.