The recent appointment of two new board members of MCX is beginning of a new phase of growth at MCX. Both board members, Mr. Amit Goela and Ms. Madhu Vadera Jayakumar, are representing superinvestors, Rakesh Jhunjhunwala and Radhakishan Damani. This development has come at a right time just before SEBI starts regulating commodity markets. All we can say is that the MCX story is very much intact and will take time to pan out but is moving in the right direction. We continue to support our thesis of investing in MCX for long term.
On the other hand, CME will provide technical and strategic support to MCX from time to time. It is a no-brainer that some time in the future, CME will either buy 15% from Kotak or from some other investor that would like to exit MCX.
Finally, the fear of competition from BSE and NSE is overblown. Maruti returned more money to its investors when its market share hit 45% as compared when its market share was 80% before new entrants. Again, as pie gets bigger, the size of a single slice will be way bigger than the original pie. MCX will definitely lose market share in next 10 years but it will have 50% market share of a 10 lakh crore market (transaction volume) as compared to 87% share of a 1 lakh crore market. Think big!