MCX Extends Software Support Contract With 63 Moons, Again
MCX renewed the contract with 63 Moons for a sum of Rs 125 crore per quarter for two quarters, totalling Rs 250 crore.
63 Moons Technologies Ltd., a provider of technology for digital markets, has once again extended its software support to Multi Commodity Exchange Ltd.—but not without being snarky.
"We wish to inform that we have once again agreed to the eleventh-hour request by Multi Commodity Exchange of India Ltd., which according to MCX is for the ‘last time’ for one more time," 63 Moons said in its statement. "This new arrangement of Software Support Service will be commencing from July 1, 2023 to Dec. 31, 2023."
MCX, India's largest commodity exchange, on its part, said it has signed an agreement with Tata Consultancy Services Ltd. for developing a new software system for the exchange and the present arrangement with 63 Moons is a stop-gap arrangement.
"To ensure all stakeholders are better prepared to migrate to the new Commodity Derivatives Platform and to ensure necessary compliances, the Company was obligated and has decided to extend the support services being rendered by its existing software vendor, 63 Moons Technologies Ltd. for six months, being the minimum period offered by the vendor, beginning from July 1, 2023, at a consideration of Rs 125 crore per quarter," MCX said in its statement.
Meaning, MCX will pay Rs 250 crore for two quarters. To put that into perspective, MCX last made a profit of over Rs 250 crore back in FY13. And their last reported profit was Rs 149 crore for FY23. This is higher than the consideration of Rs 87 crore paid for the March 2023 quarter.
TCS is the new software services provider that MCX has selected and is working on the emerging new trading platform for the exchange. However, MCX has failed to migrate to the new technology. Reportedly, the exchange has done several mock trials.
"For the count, this is the third time that MCX approached 63 Moons to extend the software support service arrangement after the long-term arrangement with MCX ended on Sept. 30, 2022 and MCX selected new technology service provider way back in February 2021," 63 Moons said in its statement. "As the founders and well-wishers of MCX, we wish them good luck with these new experiments and hope that they will reach the right destination one day."
MCX and 63 Moons, formerly Financial Technologies India Ltd., were both founded by Jignesh Shah, who had quit from the board of India's largest commodity exchange after a payments crisis at the National Spot Exchange Ltd., a subsidiary of FTIL.