Algoquant Fintech Ltd, a Delhi-based quantitative trading and investment firm focused on algorithmic and technology-driven strategies, has invested in the National Commodity & Derivatives Exchange Limited (NCDEX).
The company acquired 2,53,370 equity shares, equivalent to 0.28% of NCDEX’s post-issue share capital, for Rs 5 crore.
This minority stake marks Algoquant’s entry into India’s commodities exchange space, spotlighting NCDEX as a key player in the agricultural commodity trading ecosystem and signalling growing fintech interest in the country’s agri-derivatives market.
NCDEX Building the Foundation of India’s Agri Derivatives Market
Founded in 2003 and owned by the Ministry of Finance, NCDEX is one of India’s major players in the commodity derivatives market, operating an online, dematerialised trading platform for commodities ranging from cereals, pulses, and oilseeds to metals and energy products.
By offering futures products that enable risk management for agricultural price volatility, NCDEX has empowered farmers through transparent price discovery and reduced middlemen-driven information asymmetry, a critical step in a country where agriculture is the economic backbone.
Financial Snapshot and Market Outlook
NCDEX’s FY2025 results show a mixed performance. Revenue declined 10% to Rs 122.1 crore from Rs 136 crore in FY2024, reflecting weaker trading volumes. EBITDA losses widened to Rs 48.9 crore, with margins slipping to -40%, indicating continued cost pressures.
However, profitability surged due to exceptional income of Rs 234.7 crore, driving a PAT of Rs 236.1 crore compared to a loss of Rs 27.7 crore last year. Consequently, EPS jumped to Rs 46.86 from a loss of Rs 5.1 per share in FY2024.
While the strong FY2025 profit highlights one-time gains, NCDEX’s core operations remain under pressure. Sustainable growth will depend on improving operational efficiency and expanding trading activity in the coming years.
Still, the macro outlook remains strong. According to the Reserve Bank of India, farmer awareness of commodity derivatives has risen by 22% since 2013, reflecting deepening market penetration.
Government initiatives like the Pradhan Mantri Fasal Bima Yojana (PMFBY) are driving more farmers toward risk management and hedging products, further strengthening the commodities exchange ecosystem.
Strengthening Market Infrastructure
NCDEX continues to expand its ecosystem through strategic joint ventures, including NCDEX E-Markets Limited and National E-Repository Limited. These subsidiaries enhance collateral, logistics, and clearing services, which are essential components for efficient and transparent trading in agricultural commodities.
NCDEX Still A Core Player In Commodities
Despite facing unstable profitability in recent years, NCDEX remains a core infrastructure player in India’s commodity market, backed by strong government support and a robust technology platform.
With the rising demand for commodity futures and derivatives among farmers, corporates, and institutional participants, NCDEX Unlisted Shares are well-positioned to benefit from the next wave of growth in agri-fintech.
The minority investment by Algoquant Fintech underscores the fintech industry’s growing confidence in the potential of India’s agricultural commodity exchanges, a space for innovation and expansion.
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Algoquant Fintech Ltd has invested in National Commodity & Derivatives Exchange Limited (NCDEX) by acquiring 2,53,370 equity shares, which is equivalent to 0.28% of the post-issue share capital of NCDEX, for ₹ 5 crore. The minority stake is the gateway for Algoquant into India’s commodities exchange space, which has put NCDEX on the investor radar for its business of agricultural commodity trading.
India’s NCDEX is a major player in the country’s commodity derivatives market, and runs an online dematerialised platform for trading of commodities such as cereals, pulses and oilseeds to metals and energy products. Founded in 2003 and owned by the Ministry of Finance, NCDEX enables risk management for agricultural commodity price volatility via futures products. This has expanded price discovery for farmers, breaking middleman-induced information asymmetry critical for a country that rides on its agriculture.
Analysing NCDEX’s financials reveals a complex picture. The company has a P/E ratio of 10.24 and a market cap of ₹2432.45 crore. Although it has reported a negative operating profit (EBITDA) for the last few years, NCDEX had a net profit after exceptional items and tax of ₹262.83 crore in its FY2025 standalone results. On the bottom line front, its profit increased significantly to ₹51.87 in FY2025 from a loss per share previous year, due to exceptional items in one-time charges.
The quarterly results ending December 2024 show some strain, with net losses after tax and negative EPS, indicating ongoing operational challenges. The Reserve Bank of India notes a 22% rise in farmer awareness of commodity derivatives since 2013, signalling expanding market depth and opportunity. From the industry perspective, Indian agricultural commodities exchanges are poised for tremendous development. Market estimates are provided by service providers in the market with information on product offerings, including all services and solutions mentioned above. Projections on the size of the health and safety market are also included in this report. Government schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY) have created awareness among farmers and demand for risk management products, driving more participation on exchanges.
NCDEX’s investments in joint ventures like NCDEX e Markets Limited and National E-Repository Limited continue to strengthen its market infrastructure. These subsidiaries complement its offering in providing collateral, logistic and clearing services — all essential for efficient trading of these products.
To conclude, by facilitating the development of India’s agricultural commodities market, NCDEX is one of the underlying infrastructure players in India. Despite a couple of years of unstable profitability, with its strong government backing and the rapidly growing market, backed by a technology platform, it is well to take advantage of the increasing demand for commodity futures and derivatives in India among farmers as well as across various participants in the markets. The most recent minority investment with Algoquant Fintech further validates the fintech industry’s desire to capitalize on this expansion in agricultural commodity exchanges.
