National Commodity & Derivatives Exchange
- Revenue Contraction: Top-line declined by -6.5% CAGR, likely due to regulatory bans on certain commodity derivatives.
- Surprising Efficiency: Despite falling revenue, Net Margins expanded by 278% points, indicating aggressive cost-cutting measures saved the bottom line.
- High Profitability: Maintains a 47% Net Margin, proving that the core business remains highly profitable even at lower volumes.
Fundamentals
| NCDEX Limited Unlisted Shares Price | ₹ 458 Per Equity Share | Market Cap (in cr.) | ₹ 4108 |
| Lot Size | 500 Shares | P/E Ratio | 17.41 |
| 52 Week High | ₹ 525 | P/B Ratio | 5.41 |
| 52 Week Low | ₹ 210 | Debt to Equit | 0 |
| Depository | NSDL & CDSL | ROE (%) | 31.48 |
| PAN Number | AABCI9479D | Book Value | 84.7 |
| ISIN Number | INE127G01010 | Face Value | 10 |
| CIN | U51909MH2003PLC140116 | Total Shares | 896949730 |
| RTA | Link Intime |
Shareholding Pattern
National Commodity & Derivatives Exchange
Established in 2003 and headquartered in Mumbai, NCDEX is India’s leading online exchange specializing in agricultural commodity derivatives. Regulated by SEBI, it provides a transparent platform for trading futures and options on over twenty commodities, including soybean, mustard seed, and turmeric. Key institutional backers include LIC, NABARD, and the NSE, ensuring a robust financial and regulatory foundation.
The exchange plays a vital role in global price discovery and risk management, with several contracts serving as international benchmarks. Through subsidiaries like National Commodity Clearing Ltd., it offers an integrated infrastructure for electronic settlement and warehousing. By reducing information asymmetry, NCDEX empowers farmers and traders while utilizing high-availability, Tier IV data center technology for seamless trading.
Company Business Model
The National Stock Exchange of India operates a multi-revenue financial market infrastructure business that enables trading, clearing, settlement, and data dissemination across capital markets.
Trading Platform Operations
Provides an electronic platform for trading agricultural commodity futures and options, earning revenue through transaction fees.
Clearing & Settlement Services
Ensures risk management, margining, and guaranteed settlement of trades through its clearing mechanism, generating clearing and settlement charges.
Market Data & Index Services
Monetizes real-time and historical commodity price data sold to brokers, traders, institutions, and agri-market participants.
Membership & Exchange Services
Earns fees from exchange memberships, connectivity, and compliance-related services offered to trading members.
Competitors
NCDEX operates in India’s commodity derivatives space and competes with the following exchanges:
BSE Limited
India’s oldest stock exchange, competing with NSE in equity trading, derivatives, listings, and market data services.
Multi Commodity Exchange of India
The largest commodity exchange in India, dominant in non-agricultural commodities (metals & energy) and an indirect competitor across derivatives participation.
Indian Commodity Exchange
Competes in select commodity derivatives, with limited volumes compared to NCDEX and MCX.
National Stock Exchange of India
An indirect competitor through its commodity derivatives segment, leveraging strong technology and broker network.
SWOT Analysis
Strengths
- Market Leader in Agri-Commodities : Dominant exchange for agricultural commodity futures and options in India.
Strong Institutional & Regulatory Standing : SEBI-regulated exchange with systemic importance in price discovery and farmer hedging.
Asset-Light, Fee-Based Model : High operating leverage with revenues from transaction, clearing, and data fees.
Critical Role in Agri Ecosystem : Serves farmers, FPOs, traders, processors, and corporates—enhancing relevance and longevity.
Established Clearing & Risk Framework : Robust margining and settlement systems ensure market confidence.
Weaknesses
- Low & Inconsistent Trading Volumes : Agri derivatives volumes remain subscale compared to MCX, limiting profitability.
High Dependence on Regulation : Frequent government interventions in agri markets restrict product depth and participation.
Limited Product Diversification : Heavy reliance on agricultural commodities; minimal exposure to metals or energy.
Earnings Volatility : Revenues fluctuate with volumes, weather cycles, and policy decisions.
Opportunities
Agri Market Formalization : Digitization of agri supply chains can increase hedging participation.
Corporate & Processor Hedging Growth : Rising input-cost volatility drives demand for structured risk management.
Product Expansion : Scope to introduce new contracts, options depth, indices, and agri-linked products.
Regulatory Push for Exchange Usage : Policy support to improve farmer price realization could revive volumes.
Asymmetric Optionality : Even modest volume recovery can significantly improve exchange profitability.
Threats
- Competition from MCX : MCX’s dominance in non-agri commodities attracts broader trader participation.
Policy & Intervention Risk : Sudden bans, position limits, or contract suspensions directly hurt volumes.
Farmer Participation Challenges : Low financial literacy and access barriers limit grassroots adoption.
Sustained Low Liquidity Risk : Prolonged weak participation could impair long-term scalability.