Indian Energy Exchange (IEX), the largest exchange for trading of electricity products in the country, is planning to raise Rs 1,000 crore from its initial public offering (IPO). The company has set a price band of Rs 1,645-1,650 per share for its IPO. When calculated at the upper band of the issue price, the company will be valued at Rs 5,000 crore. The IPO is scheduled to open on October 9 and close on October 11. Anchor investors will be allotted shares on October 6. The issue comprises of 20% of the post-offer paid-up equity capital. Bids can be made for a minimum of nine equity shares and multiples of nine thereof. IEX is one of the two exchanges in India that offers to the trade of electricity products. The products traded in its platform include electricity contracts in the blocks of 15 minutes in the day ahead market, electricity contracts for the fixed terms in future, and renewable energy certificates.
With the fall in tariffs in the renewable segment and discoms not signing power purchase agreements, the volumes on Indian Energy Exchange has grown substantially over the last couple of years. The August trading volumes rose 8.5% sequentially to 3,982 million units primarily on strong demand from south India, while it was up 15.5% year-on-year basis.
On a daily average basis, IEX traded around 128 Mus. The Market Clearing Price (MCP), or the common clearing price for the entire region, at Rs 3.13 per kwh in August was 26% higher from the price in July 2017 at Rs 2.49 per kwh, and 44% higher than a year ago. It touched a record high of Rs 9.9/kwh in September, mainly due to seasonal power demand and the reduction in hydro and nuclear power. SN Goel, managing director and CEO of IEX, however, believes the increase in prices to be a temporary phase due to the higher temperature, humidity and receding monsoon that created temporary demand. “This will change to around Rs 3 per kwh level once again in a month or two,” Goel said.
In FY 2017, the company posted a net profit of Rs 113.5 crore against a net profit of Rs 100.3 in the previous financial year. In 2017, 23 companies raised Rs 30,115 crore through IPO. Listing gains and returns by newly-listed companies and also the positive sentiment in the broader market are among the reasons attributed to the trend.
BSE, HUDCO, CDSL, Avenue Supermarts, Shankara Building Products, S Chand and Company, and Cochin Shipyard are some of the companies who completed their IPO in the last eight months.