MCX set to sever tech ties with its founder 63 Moons
MUMBAI : After a year of costly extensions, MCX, India’s largest commodity derivatives exchange, is preparing to part ways with 63 Moons Technologies Ltd, its former anchor shareholder. The separation involves a crucial technology platform necessary for running its operations, including trading, clearing and settlements.
On Monday, the MCX stock hit a 52-week high, as investors celebrated the news, anticipating significant cost savings. The exchange said in a circular on 19 September that it proposes to migrate to the new commodity derivatives platform (CDP) developed by Tata Consultancy Services (TCS) by September-end, subject to necessary compliance and approvals.
It said a separate circular would be issued on the actual “go-live date". Initially, the announcement did not have a significant impact, with the share rising a mere 2.2% over three sessions to ₹1,783.55.
However, the markets reacted to the news on Monday with the stock rising 9.45% to a 52-week high of ₹1,952.20, before closing at ₹1902.30, up 6.7%. “This was much-anticipated and much-awaited news," said Siddhartha Khemka, head of research, retail, Motilal Oswal Financial Services.
“Markets digested the development today to give the stock a 21-gun salute as the exchange transitions to a new technology partner and a new era of growth, with substantial cost savings." Indeed, the cost of extension had been a major pain-point for the exchange, with expenses of the current year alone at ₹412 crore ( ₹162 crore in H1 and ₹250 crore in H2) from around ₹60 crore per annum before the technology agreement with 63 Moons, formerly Financial Technologies India Ltd, ended in September 2022. In the first quarter extension, from October to December 2022, MCX incurred a cost
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