Norges Bank buys stake in MCX worth ₹50 Cr, scrip ended on a green note

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Through an open market transaction on Tuesday, Norges Bank/Noregs Bank, the central bank of Norway, acquired 3.38 lakh shares of the Multi Commodity Exchange of India (MCX) for more than 50 crore. Norges Bank acquired 3,38,000 shares, or 0.7% stake in MCX, according to bulk deal data made accessible by the National Stock Exchange (NSE). The average price paid for the shares was 1,482.59, making the total transaction amount of 50.11 crore.

Based on a recent extension of an existing software contract of MCX, the brokerage firm ICICI Securities said recently on 1st January that “Multi Commodity Exchange of India (MCX) options has now extended the contract with existing software platform provider (63 moons) till June’23. This is disappointing considering that the new extension (6 months) is longer than the first extension (3 months) along with the related higher cost incidence now in FY23/24. While we are positive on MCX due to (1) strong continued traction in options, (2) strong business position of being India’s largest commodity exchange with monopolistic market share and (3) ultimate expectations of cost reduction from eventual software migration to new platform, some of these upsides have been captured in the ~30% rally in stock price over last quarter. Hence, we maintain our multiples but downgrade our rating from BUY to ADD with a revised target price of Rs1,669 (Rs1,795 earlier) based on 35x FY24 core EPS (unchanged) of Rs42.6 and cash per share of Rs179/ share. Continuation of problem in transfer of software platform pose downside risk.”

The shares of Multi Commodity Exchange of India (MCX) closed today on the NSE at 1,478.00 apiece level, up by 1.39% from the previous close of 1,457.70. The stock recorded a total volume of 1,092,835 shares compared to the 20-Day average volume of 395,586 shares. The stock has lost 9.10% over the past year but has gained 14.95% over the past six months. The stock has dropped 4.74% in the previous 5 trading sessions and 5.83% over the past month. The stock had touched a 52-week-high of 1,697.10 on (20-December-2022) and a 52-week-low of 1,143.00 on (16-May-2022), indicating that at the current market price, the stock is trading at 12.91% below the 1-year high and 29.30% above the 1 year low.


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