Indian Energy Exchange makes weak debut; lists 9% below issue price

IEX listed at Rs 1,500, a 9% below its issue price of Rs 1,650 on the NSE and the BSE

Indian Energy Exchange (IEX) has made a weak debut on the bourses by listing at Rs 1,500, a 9% below its issue price of Rs 1,650 on the National Stock Exchange (NSE) and the BSE (Bombay Stock Exchange).

However, the stock recovered and was trading at Rs 1,636, a 9% higher against its listing price. It hit high of Rs 1,640 and Rs 1,649 on NSE and BSE respectively. A combined 1.27 million shares changed hands on the counter on the BSE and NSE till 10:08 AM.

IEX, India’s largest energy exchange, had set a price band of Rs 1,645-1,650 per share for the initial public offer (IPO),  was subscribed by 2.28 times.  The portion of shares reserved for institutional investors was subscribed 2.56 times and that for non-institutional investors was subscribed 85% or 0.85 times. The portion of shares reserved for retail investors saw a subscription of 2.61%.

IEX holds 99.4% market share of electricity contracts in the day-ahead-market (DAM), 67.9% in term-ahead-market (TAM) and 71.2% in Renewable Energy Certificates (RECs), in terms of FY17 volumes. It has consistently expanded its participant base yoy from 2,893 in FY13 to over 5,900 registered at the end of Aug 31, 2017. Over 3,200 participants as of Aug 31, 2017 were active and located across 29 states and 5 union territories.

“IEX growth prospects are mainly driven by the factors like opportunity in short term Indian power market, large diverse customer base and proven management track record. Going forward, generation and peak power demand in India over FY17-22E is expected to record a CAGR of 29.6% and 7.3% respectively as per CRISIL Risk and Infrastructure Solutions Ltd. (CRIS),” IIFL Wealth Management said in IPO note.

In line with this, the company strategy includes attract new participants, increase trading activity, expand into global markets, develop new products and services and focus on technology up-gradation including increasing connectivity to IEX’s trading platform, it added.