📌 At a Glance
When MCX tried breaking up with its clingy old tech partner 63 Moons, the result wasn’t a clean farewell — it was a ₹222 crore quarterly alimony. SEBI’s latest 32-page report reads less like a regulatory order and more like a tragic love story between a stock exchange and the ex it couldn’t get rid of. Bonus? The source code was locked in escrow like a Bollywood dowry.
🧩 TL;DR: What Just Happened?
- MCX paid ₹222 crore in just 3 quarters to 63 Moons for “support services” — more than their annual profit.
- The software was 20 years old. They had already paid for a 99-year license.
- SEBI slapped MCX with a ₹25 lakh penalty — for late disclosures, not for the bizarre marriage of desperation and vendor lock-in.
- MCX said they couldn’t go legal — because the tech vendor might pull the plug mid-trading. Yes, India’s commodity markets were held hostage like your neighbor’s Netflix account.
🛕 63 Moons: The God of Vendor Lock-ins
Let’s get this straight.
MCX had paid for a 99-year license for the software — yes, that’s longer than the life expectancy of most Indian infrastructure projects. But thanks to clause-heavy side agreements, they still had to pay ₹15 crore per quarter for basic support — and later, that got “enhanced” to ₹81 crore per quarter when negotiations broke down.
This is not SaaS.
This is Stockholm Syndrome-as-a-Service.
📦 ₹750 Crore for Source Code — Plus Taxes, Please
At one point, 63 Moons actually quoted ₹750 crore (plus GST) to MCX just to hand over the source code. That’s not a sale — that’s digital extortion with billing compliance.
Also, the code was locked in escrow — but could only be released if:
- 63 Moons went bankrupt
- There was a force majeure event
- Or MCX’s trading halted due to a bug
So unless a tsunami hit Bandra Kurla Complex, MCX was stuck.
💰 TCS to the Rescue… Almost
In 2021, MCX did bring in TCS to build a new trading platform (CDP). But delays, unrealistic timelines, and a project plan more fragile than Paytm’s market cap meant:
- Go-live was repeatedly missed
- They had no fallback plan
- So they ran back to 63 Moons, again
SEBI pointed out MCX’s failure to vet TCS contract terms (the penalty clause was capped at ₹5.7 crore) and their overconfidence in getting the new platform live in 2 years. Spoiler: it didn’t.
🥲 ₹118 Cr Profit, ₹222 Cr Vendor Bill
In FY22, MCX made a profit of ₹118 crore. But between Oct 2022 to June 2023, they paid ₹222 crore to 63 Moons — nearly double their annual profit.
This info? Not disclosed to shareholders on time. SEBI noted that MCX failed to inform the public about the financial bomb they were sitting on.
So let’s do a quick roleplay:
MCX Investor Call, October 2022:
Analyst: “Hi, just wanted to ask, where did the cash go?”
MCX: “Support services.”
Analyst: “You mean like, quarterly bug fixes?”
MCX: “We fixed the bug… that is our existence.”
🚨 SEBI: Mild Scolding Issued, Everyone Disperse
SEBI’s findings are damning, but the penalty is a gentle slap.
Penalty: ₹25 lakh
Vendor payout: ₹222 crore
Loss of investor confidence: Priceless
SEBI agreed that the vendor had monopolistic control, the management was clueless, and TCS was overpromising like every intern on Day 1.
📉 What MCX Could’ve Done (But Didn’t)
- Plan B: Board asked for fallback options as early as March 2022. MCX came up with one… on September 29, 2022 — the day before 63 Moons’ contract expired.
- Negotiate Better: 63 Moons initially offered 33-year contracts. That’s not a tech deal. That’s a Mughal treaty.
- Legal Recourse?: MCX took two legal opinions. Both said: “Don’t poke the bear.” Because 63 Moons could just cut the power, and the markets would crash.
🧠 EduInvesting Verdict: This Isn’t Just a Vendor — It’s a Religion
At this point, 63 Moons is not just a tech firm. It’s a deity in the Indian market ecosystem.
- You pray it doesn’t crash
- You pay it whatever it asks
- And you sacrifice your margins at its altar
While India becomes the 4th largest economy, our commodity exchange was being run on legacy code and corporate hostage etiquette.
🫡 Final Words
In a world where IPOs are priced like biryani and fintech CEOs write LinkedIn posts on “resilience,” here’s a lesson:
Don’t give your software vendor more power than your CTO.
And if you do — make sure their contract doesn’t outlive your grandchildren.
