Commodity exchange NCDEX on Wednesday launched a mutual fund transaction platform called NCDEX Nidhi, marking a significant step in its transformation into a multi-segment exchange. According to reports from The Financial Express, the platform has onboarded six asset management companies — Nippon India Mutual Fund, HDFC Mutual Fund, Axis Mutual Fund, LIC Mutual Fund, Tata Mutual Fund and Invesco Mutual Fund. Managing Director and CEO Arun Raste emphasized that Nidhi is a natural extension of what NCDEX has always stood for, which is connecting India's underserved communities to formal, regulated markets. As reported by Essential Business Intelligence, the platform is designed for distributors, registered investment advisers (RIAs), AMCs and retail investors with a simple, compliant and API-ready system.
The platform is designed to expand MF penetration beyond the top 100 cities by leveraging NCDEX's agricultural ecosystem and network of farmer producer organisations (FPOs). According to The Financial Express, the exchange has already trained members of 20 FPOs as certified MF distributors after they cleared the mandatory National Institute of Securities Markets (NISM) examination. The platform offers advanced features including UPI AutoPay for systematic investment plans (SIPs), end-to-end transaction time-stamping until net asset value allocation, and detailed rejection messages instead of error codes. Raste noted that mutual fund penetration in rural and semi-urban geographies remains well below its potential, not due to lack of demand but for lack of accessible distribution. The platform is built on an API-first architecture which will allow distributors to transact either directly through the NCDEX Nidhi portal or by integrating the platform's APIs into their own systems.
The platform leverages NCDEX's extensive network of over 800 FPOs with an average size of 250 members each to reach villages across India. As reported by The Financial Express, NCDEX has already got 20 people from small villages to clear the NISM exam conducted to qualify as MF distributors. Raste explained that FPOs can gain mutual fund license of two types: one to distribute mutual funds within their organization as well as another to sell mutual funds to the general public. The exchange will help members to gain both kinds of licenses based on their convenience. He believes that the new distribution channel will help the transaction platform to differentiate itself from its rivals, opening a new market for fund houses which will benefit FPOs with additional income and aid people in smaller locations who are still investing in traditional avenues like gold and fixed deposit to enter the capital markets.
In its diversification efforts, NCDEX is targeting entry into the equity cash segment by January next year, following testing scheduled for November, subject to approval from the Securities and Exchange Board of India (Sebi). According to The Financial Express, the exchange plans to enter the cash segment first, followed by equity derivatives by July next year, subject to regulatory approvals. The exchange is backed by top brokers such as Groww and Zerodha and raised ₹770 crore last year from brokers and investors including Radhakishan Damani, Ramesh Damani, Madhusudan Kela and Sunil Singhania to fund its expansion. Rajiv Relhan, Managing Director & CEO of NCDEX Clearing Corporation, stated that the MF transaction platform marks a natural next step for NCCL, widening its role into a new asset class and reinforcing position as a settlement backbone for India's evolving markets.
Beyond the new platform, NCDEX has shared plans to launch more weather-related derivative products on rain and heat, derivative contracts on platinum and freight, alongside plans to enter the security markets in Sri Lanka and Bangladesh through partnership with the respective security markets. According to The Financial Express, Raste shared that NCDEX has already collaborated with five top AMCs and will partner with more 15 fund houses in the next 1-2 months. The exchange plans to collaborate with corporative organizations in the future to further expand the distribution network. He expressed hope that the combination of brand value of top AMCs and familiarity of rural investors with NCDEX will increase trust in mutual fund products among villages and small-towns, aiming to open a new market for fund houses which will benefit FPOs with additional income.
