MCX gets SEBI tech panel nod to launch Commodity Derivative Platform; stock up 2%

Capital markets regulator Securities and Exchange Board of India (SEBI) has given its approval to the launch of Multi-Commodity Exchange (MCX's) Commodity Derivative Platform, days after asking it to keep the proposal in "abeyance". The SEBI "abeyance" order came following a complaint from Chennai Financial Markets and Accountability (CFMA) regarding the new CDP.

"SEBI had, inter alia, advised to keep in abeyance the proposal to Go-live with the new Commodity Derivative Platform (CDP). Thereafter, replies of MCX and MCXCCL on the complaint of Chennai Financial Markets and Accountability (CFMA) regarding the new CDP was submitted to SEBI, after following due process. Subsequently, SEBI Technical Advisory Committee has recommended that MCX and MCXCCL may Go-Live with the CDP and to intimate SEBI regarding the proposed date for Go Live. Accordingly, SEBI has withdrawn its directions to MCX and MCXCCL to keep the proposed Go-Live of CDP in abeyance."

MCX had earlier said the writ petitions filed by CFMA on CDP were pending before the Madras High Court for disposal.

The matter involved technical issues, and was discussed in the SEBI Technical Advisory Committee meeting. MCX had earlier announced that the exchange will go live with the new CDM with effect from Tuesday, October 03, 2023, but it was later delayed after the SEBI order.

Amid the development, shares of the country's largest commodity derivatives exchange surged 2.07% after the opening trade today. The smallcap stock opened a gap up at ₹2,090.05 as compared to the previous session close of ₹2,030.05. In the early trade, the stock surged to an intra-day high of 2,139, up 4.6% as compared to the previous close and just shy of ₹2,139.95, its 52-week-high achieved on September 29, 2023. At the current share price, the m-cap of the company stands at ₹10,752.24 crore.

The stock has gained 4.54% in the past week; 17.13% in the past month; and has given a 38.10% return in the past six months. In the year-to-date and one-year period, the MCX stock has seen 43.58% and 58.24% jump, respectively. 

MCX is the leading commodity derivatives exchange in India with a market share of about 96.7% in terms of the value of commodity futures contracts traded in FY22-23.

In October 2020, MCX announced the development of the Exchange’s Commodity Derivatives Platform (CDP), and TCS was selected as the vendor to help it build a new technology core, transforming its trading as well as post-trade functions. In June 2023, MCX extended a software support deal with 63 Moons Technologies due to further delay in the delivery of the trading software by TCS.

For the year ending March 31, 2023, MCX' total income stood at ₹581 crore, up 34% YoY, while EBITDA and net profit were at ₹217 crore (margin at 37%) and ₹149 crore, (margin at 26%), respectively.