NCDEX has expanded its offerings with the launch of its mutual fund distribution platform, NCDEX Nidhi, with a clear focus on smaller cities. The exchange also plans to gradually enter equity trading while continuing to strengthen its core commodity trading business. Arun Raste, MD & CEO, NCDEX spoke to businessline about the rationale behind the diversification and the road ahead. Excerpt:
How is your MF platform different from those offered by the other exchanges?
The technology platform is conceptually similar. It is a pass-through platform where transactions flow to the AMC and payments are routed through the clearing corporation. The real difference lies in the distribution model. The other exchanges primarily rely on their broker network. We asked ourselves whether we should restrict distribution only to brokers or create an entirely new channel. We found that AMCs have been trying to expand beyond top 30 but have not been able to build meaningful distribution there. We have worked with rural India for years through our commodity exchange. Over 1.3 million farmers have traded on our platform. They also have surplus income but very limited access to regulated investment products. They often end up investing in gold, land, Ponzi schemes or simply keep cash idle. Our objective is to bridge that gap by creating a completely new distribution network.
