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IEX share price: IEX tanks 12% on reports of govt’s plan to implement market coupling
Source: Business Standard
Indian Energy Exchange (IEX) Shares tanked 12 per cent to Rs 209.40 on the BSE in Tuesday’s intra-day amid heavy volumes on media reports stating that the government is planning to implement market coupling for power exchanges.
The stock has bounced back 82 per cent from its June month low of Rs 134.30. It had hit a record high of Rs 318.71 on October 19, 2021.
The Grid Controller of India (Grid-India) has been requested by the power ministry to ensure that the pilot study for coupling power exchanges is completed as per the set timeline, ET NOW reported quoting sources familiar with the development.
Coupling is a model where buy bids and sell bids from all power exchanges in the country are aggregated and matched to discover a uniform market clearing price (MCP).
The Power Market Regulations, 2021 (PMR 2021), notified by the Central Electricity Regulatory Commission (CERC) provides the enabling provision for market coupling. However, it is provided in the PMR 2021 that this provision will be effective as and when the commission decides on the matter.
The CERC is yet to take a decision on the implementation of market coupling through the regulatory process, the company had said.
CERC, in its order on a shadow pilot study on market coupling dated February 6, 2024, had directed Grid India to develop software for shadow pilot within two months of the order and after that run simulation for the next four months.
The mandatory sale of URS power in DAM and RTM will lead to optimum utilisation of capacity and any further optimisation by coupling SCED and RTM may not lead to any significant value. Therefore, it is expected that the shadow pilot being implemented by Grid-India will not yield any significant gain, IEX stated in its FY24 annual report.
“We don’t see any merit in Market Coupling. We do believe that even if there is a small gain, there will be numerous complexities in its implementation, and hence Market Coupling will not be feasible,” IEX said.
The brokerage firm estimates a compound annual growth rate (CAGR) of 17 per cent/15 per cent in IEX’s volumes/PAT during FY24-27, amid falling power prices, favorable base effect and strong market share.
However, the potential implementation of market coupling is a key regulatory overhang that could dampen IEX’s growth prospects given its dominant market share, MOFSL stated.
First Published: Sep 24 2024 | 3:27 PM IST
