NCDEX, the largest commodity derivatives exchange, on Wednesday launched NCDEX Nidhi, a mutual fund distribution platform aimed at expanding financial inclusion in rural and semi-urban India. The exchange will leverage its network of over 700 farmer producer organisations (FPOs) and 200 exclusive broker organisations to reach villages and smaller cities, according to a company statement.
Platform and Distribution Network
The platform targets first-time investors beyond the top 30 cities, tapping into NCDEX's two-decade-old distribution network. NCDEX has already certified 20 individuals from small villages who cleared the NISM exam required to qualify as mutual fund distributors, the exchange said. The platform embeds UPI transactions to facilitate faster adoption, according to the release.
Fund House Tie-ups
NCDEX Nidhi has onboarded six fund houses: Nippon India Mutual Fund, HDFC Mutual Fund, Axis Mutual Fund, LIC Mutual Fund, Tata Mutual Fund, and Invesco Mutual Fund. A further 20 asset management companies (AMCs) are expected to join the platform by the end of August, the exchange stated.
Executive Perspectives
Arun Raste, Managing Director and CEO of NCDEX, said, “Nidhi is a natural extension of what NCDEX has always stood for, which is connecting India’s underserved communities to formal, regulated markets.” He added that the venture “will now become a gateway for millions of first-time investors beyond the top 30 cities to participate in the mutual fund story.” Both the regulator and fund houses are supportive of the initiative, Raste noted.
Rajiv Relhan, Managing Director & CEO of NCDEX Clearing Corporation (NCCL), said the 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.”
Tojo Banerjee, Chief of Equity Business at NCDEX, commented, “The mutual fund penetration in rural and semi-urban geographies remains well below its potential, not due lack of demand but for lack of accessible distribution. NCDEX Nidhi directly addresses that gap by putting a simple, compliant and API-ready platform in the hands of distributors, Registered Investment Advisers, Asset Management Companies and retail investors.”
Technology and Future Plans
Cybrilla, a Category-I RTA registered with the Securities and Exchange Board of India (SEBI), is the technology partner behind NCDEX Nidhi, appointed for its expertise in setting up the mutual fund platform. The transaction platform initially focuses on mutual fund distribution, with plans to eventually enter equity trading, according to the exchange. The rural and semi-urban focus is expected to deepen financial inclusion and channel household savings into capital markets, though specific volume projections were not provided.
For finance executives and treasury professionals tracking capital flows into emerging markets, the initiative represents a structural channel for retail savings to enter formal financial instruments. The use of FPO networks could lower cost of capital for mutual funds via direct distribution, while UPI integration reduces friction for first-time investors. The expansion of mutual fund penetration in underserved regions may also influence demand patterns for fixed-income and equity products over the medium term.
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