With a market capitalization of Rs 10,896 crores, the shares of Indian Energy Exchange Limited (IEX) currently trade at Rs 122.30, dragging more than 10 percent as compared to the previous closing levels of Rs 136.45.
During the initial few minutes, the stock was locked in the 10 percent lower circuit at Rs 122.8. Moreover, it touched the 52-week low price at Rs 116. In the last five trading sessions, the stock has fallen about 20 percent ranging from Rs 153.15 and dropping down to the current price levels.
Such sharp movements in the stock prices are observed after the Ministry of Power issued a directive to the Central Electricity Regulatory Commission (CERC) to undertake and implement the ‘market coupling’ process.
The market coupler, as an entity, collects all the buy as well as sell orders from power exchanges and, later on, aggregates in order to discover a uniform market clearing price across all the exchanges.
According to analysts, the ‘National Load Dispatch Center’ (NLDC) acts as the market coupler for a very small portion of the market, but, is now estimated that the same will become a full-fledged market coupler.
This market coupling process has built negative sentiments as it will take away IEX’s moat of operating as a platform for price determination.
Indian Energy Exchange Limited is a power trading platform provider based in India that offers an automated platform for physical delivery of electricity. It, broadly, has two reportable segments which comprise the ‘Power exchange’ & ‘Gas exchange’ which are basically classified on the basis of the nature of products and services.
Written by Amit Madnani
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