NSEL allays default concerns; investors still spooked

The National Spot Exchange (NSEL),which is facing the heat after it suspended trading incontracts until further notice, claimed it hasphysical stock worth Rs 6,200 crore compared to totaloutstanding contracts of Rs 5,000-5,500 crore.

NSEL’s decision to suspend trade in all contracts,except for ’e-series’ products like gold and silver, came afortnight after Government asked it not to launch new contracts.

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“We have more than sufficient outstanding to cover theoverall exposure. We have physical stocks worth Rs 6,200 crorecompared to our total outstanding contracts of Rs 5,000-5,500crore. There is nothing to worry for participant members orclients,” NSEL Chief Executive Anjani Sinha told PTI.

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The statement came hours after the Government askedcommodity regulator FMC to probe the crisis at NSEL and submita report within a day. Sebi also began a separate probe amid acrash in shares of two listed group companies.The exchange has Rs 850-900 crore in a guarantee fund,Sinha claimed.

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Several of the commodity broking houses were under the scanner for their exposure in trades done through NSEL. Among the main players, Anand Rathi Commodities, India Infoline, Edelweiss and Religare clarified either they have minimal or no exposure to contracts offered by NSEL.

“Religare Broking has no proprietary positions in NSELand our total client exposure is less than Rs 5 crore,“Religare said in a statement.Edelweiss Financial Services and its subsidiaries, ina statement said, claimed “they do not have any position,whatsoever, on NSEL”.

Motilal Oswal affirmed it is not facing any financialconstraints for payouts to clients due to NSEL ban on one-dayforward trading contracts. Its total operational levelexposure is about Rs 245-250 crore on the clients.Last month, the Consumer Affairs Ministry asked NSEL,promoted by Financial Technologies (FTIL), not to launch anynew contracts till further instructions.

The action of NSEL (in suspending trade in contracts)does not entail any financial liability on the promotercompany and the business of FTIL is as usual, FTIL Chairmanand MD Jignesh Shah earlier said in a filing to the BSE.

NSEL’s daily turnover, which was over Rs 1,000 crore tillJune, has come down to around 350 crore. The suspension in thecontracts covers most of its products, industry sources said.

PTI