In a shocking surprise to Dalal Street investors, Multi Commodity Exchange of India (MCX) has asked 63 Moons Technologies to extend the licence and maintenance contract for the third time after the original contract ended in September 2022 due to delays in the delivery of the new software being developed by Tata Consultancy Services (TCS). 

At 11 am on Friday, Shares of MCX were trading at Rs 1,464.45, 10.8% lower than the previous closing price. The scrip hit an intraday low of Rs 1,411.40, down nearly 14%. 

At the same time, 63 Moons saw its shares surge 12.9% to reach Rs 244.85. The stock jumped 18% and reached an intraday high of Rs 255.90 in the early trading hours. 

MCX hired TCS in September 2021 to design new software to replace the existing one for securities trading and market infrastructure before the end of its contract with 63 Moons on September 2022. MCX had assured its investors that the new TCS-developed technology was progressing well and the migration would be in complete motion from July 1, 2023. 

The Managing Director of MCX, PS Reddy, said that the mock trading sessions of the new platform were going smoothly with only some data migration-related issues. But market players found quite a few problems in the mock sessions. The bourse also cancelled a testing session on Friday last week. 

Due to deadline delays, the exchange had to extend its contract with 63 Moons. The first extension was for a quarter between October and December 2022, then six months until June 2023, and the latest extension is for another six months starting July 1, 2023. 

The delay has cost MCX dearly as it reported an operating loss in the March quarter driven by the steep rise in the maintenance and license cost that it pays to 63 Moons. However, commodity trading on the MCX platform will continue smoothly on July 1. 

MCX informed in an exchange filing that the new contract is signed for a consideration of Rs 125 crore per quarter, a nearly 50% markup over the consideration of Rs 87 crore of the one ending this month. The first two extensions of the 63 Moons contracts for nine months, starting October 2022, cost MCX Rs 242 crore.