MCX shares hit 52-week high after announcing commodity derivative platform launch

Shares of the country's largest commodity derivatives exchange Multi Commodity Exchange of India Ltd (MCX) hit a 52-week high today after the company announcement of launching its much-awaited Commodity Derivative Platform on October 16, 2023.

The stock opened a gap up at 1.5% up at ₹2,131 and surged to an intra-day high of ₹2,183.85, up 3.8%. At the current share price, the scrip is up 2.4% at ₹2,149 on the BSE, taking the company's m-cap to ₹10,959.55 crore.

The MCX stock has rallied 9.9% in the past week; surged 24.53% in the past month; 44.98% in the past six months; 47.29% in the year-t0-date period; and 64.71% in the one-year period.

In a statement to the exchanges, MCX today said it has issued a circular on making the Commodity Derivatives Platform live on October 16. "Exchange will go live with new Commodity Derivatives Platform with effect from Monday, October 16, 2023," says the circular.

It also plans to conduct mock trading on October 15, 2023, to allow members to participate, and validate setup and connection during the mock trading session for which a separate circular will be issued.

"Members are requested to actively participate in the Mock Trading Session to avoid any issue when Exchange plans to go live with the new version of trading software. All the Trading Members are requested to participate in the mock trading system and log in with all the user IDs available in the mock environment. User ID passwords set during the mock will be carried in the new system once the system goes live," MCX says via the circular.

Members can log in to the new front end namely the new trading workstation – MCX trade station (MTS), new member admin terminal - member control station (MCS) using SSL VPN ID, it adds. The new front end, MTS & MCS set-up will be available on the SFTP server (Extranet) from Saturday, October 14, 2023.  

The capital markets regulator Securities and Exchange Board of India (SEBI) had given its approval to the launch of MCX's Commodity Derivative Platform on October 9, 2023. The SEBI "abeyance" order came following a complaint from Chennai Financial Markets and Accountability (CFMA) regarding the new CDP. 

The matter involved technical issues and was discussed in the SEBI Technical Advisory Committee meeting. 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's 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.