MCX platform change from 3 Oct sends shares zooming

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 . The stock rose almost 20% over this period to Thursday’s closing of ₹2,092.

The jump in share price to a two-year high implies markets have priced in the cost savings, and analysts expect a potential rise in trading volumes to provide further cues to the share .

The current arrangement with TCS involves a fixed cost, unlike with 63 moons that had a variable component linked to exchange turnover . “The stock looks good, but the cost-saving advantages of the migration is priced in,” Deven Choksey, MD, KRChoksey Shares and Securities, said.

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Updated: 28 Sep 2023, 10:57 PM IST