MCX Share Price Gains 2% After SEBI Proposes To Widen FPI Access In Commodities Market; JP Morgan Lifts Target

MCX share price gained over 2% in early trade on Wednesday, after regulator Sebi issued proposals to deepen institutional participation and liquidity in the commodity derivatives market, which analysts believe to be a structural volume catalyst for the exchange. MCX shares rose as much as 2.37% to Rs 2,965 apiece on the BSE.

Markets regulator Securities & Exchange Board of India (SEBI) on Tuesday issued a consultation paper, proposing to allow Foreign Portfolio Investors (FPIs) to participate in non-cash settled, or physically settled, non-agricultural commodity derivative contracts traded on domestic exchanges, subject to a set of safeguards.

Under the proposed framework, FPIs would be allowed to take positions in deliverable non-agricultural commodity contracts but would have to unwind or roll over their open positions before the commencement of the tender or staggered delivery period.

A two-tier safeguard mechanism has been proposed to ensure that FPIs do not end up with delivery obligations.

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Currently, FPIs can only participate in the commodity derivatives segment through cash-settled non-agricultural commodity derivative contracts and indices comprising such commodities.

Sebi also proposed expanding the regulatory framework for vault managers to cover physical bullion underlying a wider range of products, including gold and silver ETFs and bullion derivatives.

Under the proposed framework, vault managers would cover physical gold, silver and other precious metals underlying Electronic Gold Receipts (EGRs), bullion ETFs, bullion derivatives and any other bullion-related instruments specified by the regulator, PTI reported.

Analysts believe the new consultation paper to be positive for Multi Commodity Exchange of India (MCX), with JPMorgan upgrading the stock and raising target price.

Volume Catalyst for MCX

JPMorgan views SEBI's new consultation paper as a structural volume catalyst for MCX, with bullion expected to be the primary beneficiary. The brokerage estimates that incremental FPI flows could drive a 9.1% and 14.0% increase in futures ADTV in FY28E and FY29E, respectively, while options ADPTV is projected to rise 4.5% in FY28E and 10.0% in FY29E.

It upgraded the stock to ‘Overweight' from ‘Neutral', and raised MCX share price to Rs 3,500 from Rs 2,560 earlier, increasing the target multiple to 45x from 35x.

Jefferies said that FPI participation in cash-settled commodity futures and options currently stands at 5–6%. A similar level of participation in non-cash-settled, non-agricultural contracts could potentially add 3% to MCX's PAT, the brokerage noted.

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It added that deeper adoption of commodity index options, such as Bulldex and Metldex, could provide an additional PAT upside. These contracts currently have negligible volumes, but could contribute around 10% to PAT if their volumes reach 10% of monthly equity ADTO over the next three years, Jefferies said.

The brokerage firm has a ‘Buy' call on MCX shares with a target price of Rs 3,600 apiece.

Morgan Stanley highlighted that FPIs contributed to ~4% of total notional turnover in FY26 and ~2% in Q1FY27, per SEBI data. Share from FPIs is likely to be higher when based on cash-settled contracts notional turnover, where FPIs are currently allowed to participate.

At 9:40 AM, MCX share price was trading 1.45% higher at Rs 2,927.75 apiece on the BSE.

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