Shares of the Multi Commodity Exchange of India (MCX) reached a record high of Rs 5,966.55, marking an impressive nearly 6% increase during intraday trading on the Bombay Stock Exchange (BSE) this Wednesday. This surge represents the fourth consecutive day of gains for MCX shares, which have appreciated by 13% over this period. Since hitting a low of Rs 2,917 in June, the stock has more than doubled in value, reflecting a remarkable rise of 105%. Over the past 16 months, MCX shares have skyrocketed by an astonishing 340%, climbing from Rs 1,356.
As India’s premier commodity derivatives exchange, MCX commands approximately 97.84% market share regarding the value of commodity futures contracts traded during FY2024-25 (April to June). The exchange facilitates trading across various commodities including bullion, energy resources, metals and agricultural products while also offering sector-specific commodity indices. Additionally, MCX has established strategic partnerships with several international exchanges and trade associations both within India and abroad.
In its annual report for FY24, MCX highlighted that an anticipated increase in commodity demand due to economic growth could present new avenues for innovation and product development tailored to meet stakeholder needs across both agricultural and non-agricultural sectors. Consequently, the company’s outlook remains optimistic as it anticipates rising demand driven by enhanced economic activities alongside a growing necessity for effective management of commodity price risks.
The company noted that heightened education and awareness surrounding commodity derivatives—coupled with technological advancements facilitating easier access to market platforms—are likely to drive greater participation on its platform in upcoming years. Furthermore, engagement from financial institutions is expected to escalate as clients increasingly seek exposure to these derivatives through services offered by mutual funds and portfolio managers.
On another note concerning regulatory developments affecting commodity derivatives markets: recent adjustments made by the Securities and Exchange Board of India (SEBI) have reduced the minimum staggered delivery period for such contracts from five working days down to three. The management expressed optimism about implementing this change soon across all participant transactions.
Motilal Oswal Financial Services (MOFSL) has reaffirmed its ‘Buy’ recommendation on MCX with a target price set at Rs 6,500 based on projected earnings per share estimates for September ’26 at a multiple ratio of 42 times.
To further enhance trading volumes moving forward; MCX is set to introduce new products including serial contracts; index options; monthly gold futures at ten grams; cotton seed wash oil; crude sunflower oil contracts among others currently under development. Once future volumes surpass Rs 1,000 crore threshold levels for these offerings; options contracts will be launched accordingly.
Currently estimated retail participation stands at around ~0.9 million individuals—a figure that could see significant growth following new product introductions along with favorable changes in transaction fee structures aimed at benefiting traders through true-to-label charges regulations alongside robust technology solutions provided by discount brokers coupled with lower ticket-size contract offerings from MCX itself according to insights shared by brokerage firms.
Starting October 1st ,2024 ,MCX will initiate fixed annual maintenance contract payments towards Tata Consultancy Services(TCS), eliminating previous quarter volatility associated with variable costs .This transition is expected not only improve profitability but also allow management focus shift towards scaling business operations effectively without incurring penalties against TCS thus paving way forward strategically .
