On September 29, shares of the Multi Commodity Exchange of India (MCX), the nation’s largest commodity derivatives exchange, witnessed a sharp decline of over 8%, marking its most significant drop since June. This decline followed the decision by the Securities and Exchange Board of India (SEBI) to temporarily suspend the scheduled launch of MCX’s new technology platform.
The transition to the new platform, developed in collaboration with TCS, was originally slated for completion by October 3. However, it is now unlikely to meet the initially projected timeline.
At 9:25 am, MCX’s stock was trading at Rs 1,944.10 on the NSE, down 7% from the previous closing price. In the five preceding trading sessions, the stock had surged by more than 16% in anticipation of the new platform’s launch.
In an official filing, MCX stated, “The regulator has informed that since the matter involves technical issues, the same would be discussed in the SEBI Technical Advisory Committee meeting, which would be held shortly. Meanwhile, SEBI has advised the exchange to keep the proposed Go-Live of CDP in abeyance.”
“As the Exchange is ready and keen to go-live as soon as permitted, the exchange will continue to conduct CDP mock tests pending further directions in the matter from SEBI,” the statement added.
The new platform had been scheduled to go live three months ahead of the December deadline. At the end of June, MCX had extended its support services contract with 63 Moons for an additional six months, at a cost of Rs 125 crore per quarter.
Analysts noted that MCX has experienced significant growth in options volume, but uncertainty surrounding the technology transition has been a key concern.
“We believe that following the technology transition, investor focus will shift towards product launches, volume growth, and improving profitability. We have increased our earnings per share estimate by approximately 8-9% for FY25/26E and adjusted the multiple to 28x (compared to 25x earlier) to account for the surge in options and reduced uncertainty related to the technology transition,” wrote Amit Chandra of HDFC Securities in a note dated September 27.
HDFC Securities has set a target price of Rs 2,400 for MCX, suggesting a potential upside of around 24% from the current levels.
