MCX Shares Hit Life High After SEBI Nod To Launch Electricity Derivatives
The shares of MCX rose as much as 5.32% to Rs 7,812.50 apiece to hit life high.
Shares of Multi Commodity Exchange of India Ltd. rose over 5% on Monday to hit a fresh life high after it received approval from the Securities and Exchange Board of India to launch electricity derivatives.
The electricity derivatives contracts to be introduced by MCX will enable generators, distribution companies and large consumers to hedge against price volatility and manage price risks more effectively by enhancing efficiency in the power market.
"The introduction of electricity derivatives marks a pivotal development in India’s commodities ecosystem," Praveena Rai, chief executive officer of MCX, said. "These contracts will offer participants a reliable, transparent, and regulated platform to manage power price risks, which are becoming more dynamic due to renewables and market-based reforms."
"With India's growing focus on renewable energy and open access power markets, electricity derivatives can serve as a vital bridge between the physical and financial sectors," Rai said.
Earlier in May, SEBI had imposed a monetary penalty of Rs 25 lakh on the MCX for failing to properly disclose information related to its software contract with 63 Moons Technologies Ltd., formerly known as Financial Technologies India.
According to the SEBI order, MCX did not disclose certain material information to the public and admitted this lapse as an inadvertent mistake. SEBI noted that since the exchange had accepted the lapse, the violations stood established under the relevant regulatory provisions.
MCX Share Price Advances
The shares of MCX rose as much as 5.32% to Rs 7,812.50 apiece to hit a life high. It pared losses to trade 3.91% higher at Rs 7,692.50 apiece, as of 9:34 a.m. This compares to a 0.41% advance in the NSE Nifty 50 Index.
It has risen 112.11% in the last 12 months and 23.57% year-to-date. Total traded volume so far in the day stood at 5.6 times its 30-day average. The relative strength index was at 68.56.
Out of the 11 analysts tracking the company, seven have a 'buy' rating on the stock, three recommend 'hold' and one suggests 'sell', according to Bloomberg data. The average of the 12-month analysts' price target implies a potential downside of 19.7%.
