Indian Energy Exchange soars 20%, hits new high as firm to mull bonus issue

Shares of Indian Energy Exchange (IEX) soared 19 per cent to hit a record high of Rs 956.15 on the BSE in Tuesday’s intra-day trade after the company announced the board will consider a maiden bonus issue proposal in their forthcoming board meeting on Thursday, October 21, 2021. The stock surpassed its previous high of Rs 819 touched on October 13, 2021.

The board of directors of the company in their meeting scheduled on October 21, 2021, shall inter-alia, also consider the proposal for declaration of bonus issue of equity shares subject to the approval of the shareholders of the company, IEX said in an exchange filing on Monday after market hours. The board will also consider the unaudited financial results for the quarter ended September 30, 2021.

IEX is India’s premier energy exchange, providing a nationwide, automated trading platform for physical delivery of electricity, renewable power, renewable energy certificates and energy saving certificates. The exchange platform enables efficient price discovery and increases the accessibility and transparency of the power market in India while also enhancing the speed and efficiency of trade execution.

In the past one month, the market price of IEX has appreciated by 64 per cent, as compared to a 5 per cent gain in the S&P BSE Sensex. In the past three months, it has zoomed 124 per cent over an 18 per cent rise in the benchmark index.

The India Ratings and Research (Ind-Ra) agency projects a strong power demand recovery of 10-12 per cent year-on-year (YoY) in the fiscal year 2022, with sustained demand growth of 6-6.5 per cent YoY for the fiscal 2023 and 2024, on the back of a strong manufacturing thrust, early signs of capex revivals, pick-up in exports, initiatives such as Aatmanirabhar Bharat, and industrial and economic revival in the wake of the pandemic.

With the Supreme Court disposing of a spat between Central Electricity Regulatory Commission (CERC) and Sebi, electricity can now be traded like other commodities with forward contracts and derivatives on exchanges. This settlement will open the gates for the introduction of longer duration delivery bases contracts in power exchanges and IEX will be a beneficiary, according to an analyst at ICICI Direct.

“This will not only add to volumes but also provide new products to the market. The shift of power buying pattern from power purchase agreements (PPAs) to short term market catalysed by MBED is expected to lead to a strong surge in volumes from FY24E. This can provide strong volume growth traction to power exchanges like IEX,” the brokerage firm said. The stock was, however, trading above the target price of Rs 910 per share.

At 10:01 am, IEX was trading 15 per cent up at Rs 916.60 on the BSE, against a 0.47 per cent gain in the S&P BSE Sensex. A combined 17.38 million equity shares have changed hands on the NSE and BSE so far.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor