You have been reading stories of women entrepreneurs leading the corporate show in key sectors like IT and banking in the 'rising India.'
'Woman power' has now spread to the booming commodities market in the country.
Meet Poonam Gupta, vice president, business development, the National Multi Commodity Exchange of India (NMCE), India's leading multi-commodity exchange.
These days, it is difficult to meet Poonam at the NMCE corporate headquarters in Ahmedabad. She is traveling most days, taking up the mantle of expanding the reach of online commodity trading and establishing NMCE's leadership position across India.
Last year, Poonam led the NMCE delegation at the FIA Asia Conference on Commodities held in China besides being invited as a guest speaker at many conferences & seminars to speak on commodity futures trading.
She is also a visiting faculty at various management institutes, she guides students of IIM (A) with their summer internship programmes.
In an exclusive interview with Commodity Online Special Correspondent Shailesh Bhatt, Poonam talks about the challenges of leading a commodity exchange.
NMCE has been the first mover in setting up a national commodity exchange. How has been the journey in the last few years?
The journey has been an amalgamation of challenges, victories, competition and growth. We took up NMCE as a challenge, won this race by setting the benchmark for the industry, we are competing with fellow exchanges, that mark betterment to entire industry, and consistent growth has been on the cards always.
What has been the growth rate of NMCE in turnover in the last two years? What is the membership base now?
NMCE has grown manifolds in terms of turnover. We have seen growth of about 530% in last two years in terms of number of contracts traded and expect similar results in the next fiscal. NMCE has jumped 5 positions to become world's 14th largest commodity exchange as per UNCTAD (United Nations Conference on Trade and Development) and has also been crowned as the fastest growing exchange by UNCTAD.
The membership base has increased to a whooping 26% from in FY 2005-06 onwards and this will continue.
How many commodities are traded at NMCE?
Around 62 commodities are traded on NMCE platform, which includes Metals, Bullions, Oil, Oil seeds, Spices, Plantations, Fibers, etc.
Why is it that NMCE has largely concentrated on agro commodities?
In true sense when NMCE was conceptualized, the vision was to organize the fragmented forward trading in agro-commodities, the idea generated by looking into trading systems of Ahmedabad Castor Trading, Gur trading in Muzzafarnagar, Pepper trading in Kochi, etc.
And we believe that the true sense of commodity lies in agriculture market where organized markets and consolidation is required with backing of credit system, technology, proper warehousing and infrastructure and tools like price discovery and risk management can be applied at the fullest.
NMCE is the only exchange that has enforced a compulsory delivery system. How do you execute this? Are there many issues involved in managing the commodity deliveries?
NMCE was the first exchange to enforce delivery and now as per Forward Market Commission all the national exchanges have to have mandatory delivery in all commodities.
Execution of delivery systems is backed by matching process during the delivery period which is from 12th to 15th of every month. The Central Warehousing Corporation provides entire warehousing facility along with assaying and issues a warehouse receipt to the depositor of the goods. We also provide the facility of pledging this warehouse receipt and obtain about 90% finance.
As such, the exchange has not faced major issues in deliveries; the awareness about delivery mechanism has to be proper which is facilitated by the exchange to each member whenever required.
How is CWC helping NMCE in managing the delivery system?
As I said earlier, CWC is the lead promoter of NMCE and entire warehousing support including assaying is provided by CWC. CWC has over 500 warehouses across the country with storage capacity of over 10 million metric tones. Our members are given the facility to pledge the warehouse receipts issued by CWC to get up to 90% finance.
What is the size of commodity inventories that NMCE has at CWC? For instance, we read that have touched a milestone in rubber inventory in January.
I can say till date, including all commodities, members of NMCE must have stored more than 1 lakh tonnes of goods in CWC warehouses. The present stock position is over 18,000 tonnes.
Is NMCE going to launch new contracts in new commodities soon?
As per the market feedback, the research team keeps a close watch at prospective commodities. As soon as the ground work is over and necessary permissions are received we shall come up with widely demanded commodities in the market.
There are reports that NMCE is getting ready to divest its stake to equity investors? Can you comment?
The commodity exchanges are awaiting the decision of FMC for divesting any amount of equity to prospective investors. We are awaiting the guidelines and the decisions will be taken only after the receipt of the same.
There are also reports that BSE is keen to take over NMCE. Can you comment?
There are no discussions regarding takeover with anybody. Equity stake is under consideration with various domestic & international investors. However nothing is finalized yet.
What are the new business initiatives at NMCE?
I can just say that what we are demonstrating now as our business initiatives is only a promo; the movie is still to be released. Also the endeavor of the company is to get new and innovative products backed by supreme customer service and that what we are working very closely towards.
To sum up what I believe is what Peter F Drucker said: "The best way to predict the future is to create it."
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