The shares of Indian Energy Exchange Ltd. (IEX) jumped as much as 5.85% to touch the day’s high of Rs 153.80 a piece during the early hours of the trading session on Wednesday. In the past month alone, the stock has gained roughly 14% as the company has been conducting buyback of shares via the “Open Market” route.
In its filings with the exchanges, the company updated that it had bought a cumulative 68,54,198 equity shares at an average acquisition price of Rs 143.07 per share on Tuesday, March 14, 2023. The total purchase transaction was valued at Rs 98.06 crore.
This is along the lines of the approved proposal for the buyback of fully paid-up equity shares of the company. The board had announced in November last year that it would be purchasing shares from the market at a maximum price of Rs 200 per share with a total purchase value cap of Rs 98 crore.
But the buyback is not the only reason why this small-cap power trading company has been in focus lately.
The Ministry of Power put to use Section 11 of the Electricity Act, an emergency legislation to increase the energy generation capacity of the power plants in India. The ministry notified the coal-based power to operate at full utilisation capacity for the next three months from March 16 of this year.
The reason cited behind this is the higher electricity demand during the April to June period due to intense summers. The ministry further noted that energy demand shall reach its height of 229 GW in April.
The statement read, “To ensure availability of electricity to meet the anticipated demand, the generation from ICB [imported coal-based] plants need to be increased… All ICB power plants shall operate and generate power to their full capacity.”
This development is expected to aid earnings of power exchanges like IEX such that any surplus power left after the power purchase agreements have been signed will be allowed to be traded.
IEX is a leading energy trading company in India allowing automated trading for the physical delivery of electricity, renewables, and certificates. It has a pan-India presence with over 7,300 participants across 29 states and 5 UTs. It is regulated by the Central Electricity Regulatory Commission and is listed on NSE and BSE both.
Written by Vikalp Mishra