Commodity exchange NCDEX launches Mutual Fund transaction platform. Here are the details

Commodity exchange NCDEX on Wednesday, July 29, launched its mutual fund transaction platform - NCDEX Nidhi - as it steps into the equity market, dominated by NSE and BSE.

NCDEX Nidhi will rival platforms like BSE Star MF and NSE MF Invest. NCDEX sees an opportunity in expanding mutual fund distribution into India's vast hinterlands, where it has strong connect through over 800 FPOs (farmer producer organisations) that trade on its commodities platform.

Arun Raste, the MD and CEO of NCDEX says the aim is to become a multi-segment exchange. The MF platform is a natural extension for the exchange in terms of connecting India’s underserved communities to formal, regulated markets, he added.

"With this launch, our reach into rural and semi-urban India, built over two decades, now becomes a gateway for millions of first-time investors beyond top 30 cities to participate in the mutual fund story, while we continue to serve our core agricultural stakeholder, " pointed Raste.

The launch of the mutual fund platform is part of NCDEX's broader plan to expand into the equity market.

It aims to launch equities trading in early 2027. It will launch the equity cash segment first and follow it up with a foray into equity derivatives six months later.

“If you look at data, about 20 million new investors come into equity every year and around 40 per cent are from the areas where we operate. So, the incremental number of investors who are coming into the market is mainly from Tier III, IV and V towns, where we have clear-cut brand recall, and we will be in a position to capitalise on that,” Raste had told Business Today in a recent interview.

On NCDEX's MF platform, every investor consent and order will be timestamped at the point
of creation, ensuring transparency and audit-ready compliance for applicable NAV processing, SIP (systematic investment plan) mandates can be activated seamlessly across all major UPI
applications, cutting paperwork and improving activation speed. Also, investors will be able to choose their preferred frequency, payment mechanism and mandate type.

While, NCDEX is making a push into the equities market, it will continue to scale up its commodities play. Earlier this month, NCDEX relaunched black pepper futures, reviving one of its most historically significant contracts.

The exchange also intends to launch contracts on platinum as a part of its precious metals play. It may also launch cotton contracts and is working on a product for freight derivatives, Raste had said.

In May this year, it became the first exchange in India to launch an exchange-traded weather derivative contract – Rain Mumbai. It also plans to launch Rain Chennai later this year. Another weather-related product related to heat (temperature variations) is likely to follow later.