MCX shares surge 8.15%, hit 52-week high; here’s why

Shares of Multi Commodity Exchange of India Ltd (MCX) surged 8.15% to touch a 52-week high of ₹3,168 against the previous session close of ₹2,929.15 on the BSE today. The surge in shares was observed after the company on Friday last week said its board has decided to recover “technology cost for the old platform” from its subsidiary Multi Commodity Exchange Clearing Corporation Ltd. (MCXCCL).

The MCX shares opened a gap up at ₹2,934.95 and surged to an intra-day high of ₹3,168 on the BSE, taking the company's m-cap to ₹15,981.61 crore. The shares of the exchange and data platform have a 7.53% return in the past week; 37.60% in the past month; 125.18% in the past six months; and 115.06% in the year-to-date period. 

MCXCCL is a wholly owned subsidiary of MCX, which holds 239,985,000 equity shares of MCXCCL of ₹10 each. Since the start of operations of MCXCCL, the technology costs are shared between parent MCX and MCXCCL. “With effect from October 16, 2023, the technology platform has been changed over to a new platform, for which the technology cost sharing is being finalised as per Transfer Pricing Norms, subject to confirmation from the Statutory Auditors,” the company says via a filing.

Pending the revised sharing of cost, the MCX board on November 25, 2023, decided to recover technology cost for the old platform from MCXCCL only till October 15, 2023, on a “pay for use basis”, MCX says via a stock exchange filing.

The company says the balance expenditure of ₹35 crore, on the old platform, for the period October 16, 2023, to December 31, 2023, will be incurred by MCX. Additionally, to meet its operational requirements, MCX will provide a maximum of ₹25 crore of unsecured loan/inter-corporate deposit to MCXCCL for 6 months. It’ll bear interest at the rate based on 6-month treasury bills + 0.50% markup p.a.

MCX last month received approval from capital markets regulator SEBI panel to launch its much-awaited web-based commodity derivatives platform (CDP). MCX went live with the new CDP on October 16. The migration was successfully completed in 2 years and 8 months after MCX announced its partnership with TCS for the development of a new technology platform in February 2021.

For the quarter ended September 30, 2023, MCX's revenue increased 30% to ₹165 crore compared to the corresponding three-month period ended September last year. Its income stood at ₹184 crore vis-à-vis ₹146 crore during the corresponding period in the previous year. EBITDA was recorded at ₹(9.78) crore as against ₹83.85 crore in the corresponding period of FY22-23, mainly on account of payment made to the technology vendor and contribution to SGF. The company's net profit stood at ₹(19.07) crore, against ₹63.27 crore in the year-ago period.