MCX's botched software switch cost it Rs 180 crore extra and 12.5% of its shares

Multi Commodity Exchange of India selected Tata Consultancy Services in February 2021 to design and deploy its new trading software, replacing the platform long provided by 63 Moons Technologies before that contract ended on September 30, 2022. The replacement wasn't ready. TCS's delivery slipped repeatedly — the timeline moved from December 2022 to June 2023 — forcing MCX to renew 63 Moons's software support for a third six-month term beginning July 1, 2023.

The extensions carried a visible price. MCX paid Rs 81 crore in software charges to 63 Moons in the March 2023 quarter alone, leaving quarterly operating performance 'subdued,' and agreed to an additional Rs 180 crore over three quarters for the extensions, per HDFC Securities analyst Amit Chandra. On June 30, 2023, MCX shares tanked 12.5% to Rs 1,437 on the news of the third renewal.

The payoff was still ahead: once the shift happened, analysts expected EBIT margins to expand to about 56% in FY2025 from 27% in FY2023 on lower technology costs and options volume growth. Mock trading had cleared 96-97% of test cases with 170-180 unique members participating, but MCX cancelled a scheduled mock session the week before — and then extended the old contract again.

An extra Rs 180 crore paid to 63 Moons over three quarters, Rs 81 crore of software charges in Q4 FY23 alone, and a 12.5% single-day share fall.

MCX hired TCS in September 2021 with the replacement due before the 63 Moons contract ended in September 2022 — the deadline slipped to June 2023.

Each slip forced another paid renewal of the legacy software: three six-month extensions, at Rs 180 crore of extra cost.

The market repriced the delay instantly: 12.5% off the share price on the morning the third renewal was announced.

Switching the platform that runs your whole business needs a cutover date you can actually hold — every slip re-prices the old contract.

The bourse said the new platform had been tested for several hours and it was confident the shift would happen at the end of June 2023, with the TCS contract running six years and annual maintenance of Rs 8-10 crore from year two; the technology shift was, in the company's own words on its conference call, taking longer than expected.