MCX surges ahead of platform change
MUMBAI : The MCX stock surged 9% to an almost two year intraday high of ₹2,114.40, after the country’s largest commodity derivatives bourse informed the stock exchange that it would migrate to the TCS commodity derivatives platform by 3 October. The Street cheered the news as the migration will end the heavy cost that MCX was paying its vendor 63 Moons for extension of its software contract since September last year. The cost incurred for the one-year extension stands at ₹472 crore, against the ₹60 crore per annum it was paying 63 Moons for the platform before the contract expired in September last year.
The cost was a financial drain on the exchange as every extension entailed the vendor raising the cost. Thanks to the jump in support charges, the total expenditure jumped to ₹385.6 crore in FY23, a 69% jump from a year ago . The first extension from October to December last year cost MCX ₹60 crore.
The six month extension from January to June cost ₹162 crore. Finally, another six-month extension through December 2023 saw costs rising to ₹250 crore. As a result of high costs, the company’s profit fell by 53% year on year to ₹19.7 crore in Q1FY24.
The company’s expenditure surged to ₹139.5 crore in Q1 from ₹65.3 crore a year ago. “The overhang of the extensions are out and we could see the share surpass the record high of ₹2,135 apiece shortly," said Rajesh Palviya, derivatives & technical head, Axis Securities. The market has cheered the stock since 19 September, when it said it proposed to move to the new platform by September-end .
Read more on livemint.com
