National Spot Exchange
|Key people||Shri Shankarlal Guru, Chairman;
Jignesh Shah, Vice Chairman;
Anjani Sinha, MD & CEO
National Spot Exchange (NSEL) is a Commodities exchange in India, and is a joint venture of Financial Technologies (India) Ltd. (FTIL) and National Agricultural Cooperative Marketing Federation of India (NAFED). National Spot Exchange commenced its live trading operations in different commodities on Wednesday, 15 October 2008. It began trading in pre-certified cotton bales for Mumbai delivery and imported gold and silver bars for Ahmedabad delivery immediately, and has since added a number of commodities.
National Spot Exchange's stated mission is to develop a common Indian market by setting up a nation-wide electronic spot market and providing state of art trading, delivery, and settlement facilities in various commodities. This exchange is now in the middle of a controversy due to a major commodity scam and all the trades have been stopped.
- Selling - NSEL provides an electronic trading and auction platform to sell commodities (Agri, bullion and Metals).
- Procurement - Bulk buyers can procure the agri-commodities directly from farmers through electronic platform provided by the NSEL.
- Warehousing - NSEL provides warehousing facilities for various commodities and also facilitate to sell it through the electronic platform to the bulk buyers and millers situated across the country.
- Investment - NSEL provides investment instruments. E-series products launched by NSEL can be bought by the investors for accumulation in the demat account, just like the shares in the equity market. Currently, E-Gold, E-Silver and E-Copper are available to investors.
- Arbitrage - A trader can do arbitrage using different prices available for the same commodity.
- Single day trading contracts
- Intra-day trading with settlement of obligation on net basis
- All positions outstanding at end of the day resulting into compulsory delivery
- Demat delivery facility available
- Fungibility of delivery between National Spot Exchange and MCX with common ICIN nos
- Loan facility against pledge of demat / warehouse receipt
- Cash futures arbitrage opportunity
A new form of commodities investment: Initiative of NSEL with E-Series Products
For the first time in India, National Spot Exchange has introduced E-Series products in commodities. Retail investors can now trade and invest in commodities like they invest in equities. This will be a unique market segment, which will function just like cash segment in equities, but offer commodities in the demat form in smaller denominations.
The clearing and settlement pay-in and pay-out will be based on a settlement cycle as per the practice in the stock market. This instrument will provide ample opportunity to the masses as secured investment in their product basket of diversification.
NSEL launched its first product under the E-Series as E-Gold on Wednesday, 17 March 2010. Clients/retail investors who wish to purchase E- GOLD units are required to open their beneficiary account with NSEL empanelled Depository Participants (DPs) and disclose their client ids and DP ids to their respective members to enable them to transfer the units to the respective client’s accounts. On receipt of demat ICIN in the CM-POOL account, the member should transfer the same to the beneficiary account of the respective client.
NSEL has made necessary arrangements with National Securities Depository Limited (NSDL), and Central Depository Services (India) Ltd. (CDSL) is the depository for holding commodity units in the electronic form.
E-series trading has been suspended w.e.f 5 August 2013 till further notice.
Commodities traded with their delivery locations
|Arecanut||Shimoga, Channagiri (Karnataka)|
|Bajra||Jaipur (Rajasthan), HAFED Warehouses|
|Castor Seed||Palanpur, Kadi, Jagana, Mehsana, Patan, Chandisar, Gandhidham, Visnagar, Panthawada, Sidhpur (Gujarat )|
|Castor Oil||Kandla ( Gujarat )|
|Chana Kantawala||Indore ( Madhya Pradesh)|
|Cotton Bales||Mumbai, Yeotmal, Nagpur, Wani, Amravati, Akola, Khamgaon, Dhule, Jalgaon, Aurangabad, Parbhani, Nanded, Parli (Maharashtra),Himmatnagar, Rajkot ( Gujarat), Adilabad, Nizamabad (Andhra Pradesh)|
|Desi Chana||Delhi, Bikaner, Jaipur, Sri Ganganagar (Rajasthan), Ganj Basoda, VIdisha (Madhya Pradesh), Osmanabad (Maharashtra), Gadag (Karnataka),|
|Gold||Ahmedabad, Rajkot (Gujarat), Mumbai (Maharashtra), Kolkata (West Bengal), Hyderabad, Vijayawada (Andhra Pradesh), Chennai (Tamil Nadu), Jaipur (Rajasthan), Delhi|
|Groundnut||Jaipur, Bikaner, Jodhpur (Rajasthan), Maliya Hatina (Gujarat)|
|Guar Seed||Bikaner, Jaipur (Rajasthan)|
|Guar Gum||Jodhpur (Rajasthan)|
|Lemon Tur||Mumbai (Maharashtra)|
|Maize||Maheshkhoont (Bihar), Jalgaon (Maharashtra), Umerkote (Orissa), Davangere (Karnataka)|
|RM seed||Jaipur, Jodhpur (Rajasthan)|
|Silver||Ahmedabad, Rajkot (Gujarat), Mumbai (Maharashtra), Kolkata (West Bengal), Hyderabad (Andhra Pradesh), Chennai (Tamil Nadu), Jaipur (Rajasthan)|
|Urad FAQ||Mumbai (Maharashtra)|
|Wheat||Rajkot (Gujarat), Jaipur, Chomu (Rajasthan), Delhi, Vidisha (Madhya Pradesh)|
|Yellow Peas||Mumbai (Maharashtra)|
|Soyabean||Ganj Basoda, Vidisha (Madhya Pradesh), Jalgoan, Nandurbar (Maharashtra)|
|Cottonseed Wash Oil||Kadi (Gujarat)|
|RBD Palmolein||Mundra- Adani, Kandla- Gokul, Kandla- GUJOIL|
|Agri-Commodity||Non-Agri Commodity||Intra-day (Agri & Non-agri)||E-Series Product|
|Monday - Friday||10.00 to 18.00 hours||10.00 to 23.30 hours||10:00 to 16:00||10.00 to 23.30 hours|
|Saturday||10.00||10.00 to 14.00 hours||No Trading||No Trading|
The first payout from borrowers on NSEL to 148 broker members, representing 13,000 investors, was unsuccessful with the exchange managing to recover Rs 92.12 crore against the Rs 174.72 crore it was supposed to pay out every week for the next five months beginning August 20. Nine of the two dozen borrowers who defaulted are NK Proteins, ARK Imports, LOIL Overseas Foods, Lotus Refineries, NCS Sugars, Spin Cot Textiles, Tavishi Enterprises, Vimladevi Agrotech, Yathuri Associates. Of these, NK Proteins has the highest liability of over Rs 900 crore. Other officials who were removed from their positions along with Sinha are Amit Mukherjee (assistant VP, business development), Jai Bhaukhundi (assistant VP, market operations), Maneesh Chandra Pandey (manager - business development), Santosh Mansingh (assistant VP - market operations), HB Mohanty (assistant VP - market operations) and Shashidhar Kotian ( CFO). However, the exchange has not sacked Sinha and the other officials who will now assist PR Ramesh, a former Sebi official, who has been appointed "officer on special duty" to exercise all powers of the CEO.
A summary of the NSEL debacle is covered in the Economic & Political Weekly by Dr. Jatin Pancholi.
The Criminal angle to the whole scam has come under scanner and EOW Mumbai police has already started investigating the NSEL scam.
- NSEL zeroes in on five states for spot trading . Business Standard, 8 June 2008
- NSEL signs MOUs with states. The Financial Express, 4 June 2008
- February date for spot trade in farm crops, The Telegraph, 16 Jan 2007
- Spot exchange centres to be set up in Kerala, BusinessLine, 29 Nov 2006
- MCX to roll out spot exchange in January, BusinessLine, 24 Nov 2006
- National Spot Exchange website