IEX Hits New 52-Week Low, Sheds 22% in 2 Days: Decoding the Freefall

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IEX Hits New 52-Week Low, Sheds 22% in 2 Days: Decoding the Freefall
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the Indian power trading exchange Indian Energy Exchange (NS: IIAN ) fell to a new 52-week low of Rs 116 apiece on Friday and plummeted 15% in the session.

The stock extended its freefall for the second day in a row, eroding 22% in only two trading days.

The energy exchange’s stock has been on a rout since the past two sessions following a directive released by the Ministry of Power on June 2, asking the Central Electricity Regulatory Commission (CERC) to begin the ‘market coupling’ process consultation and implementation.

The introduction of a market coupler would bring uniformity in power pricing, reducing exchanges to only a bid aggregation platform. A super exchange would be put in place, most probably a government entity, which would be responsible for price discovery.

At present, IEX enjoys dominance in the electricity spot price determination market in India and is the most trusted platform for it.

However, with a market coupling mechanism in place, competition for IEX is likely to increase as more energy exchanges will enter the market, working as a major headwind for IEX’s business going ahead.

Indian Energy Exchange enjoys almost a 100% market share in the RTM and DAM segments, contributing to nearly 75-80% of the exchange volumes, reports suggest.

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  • Si Pru @Si Pru
    How does one deal with it now - considering I have a holding at 165 per share?
    Like 0
  • Vivek Sharma @Vivek Sharma
    Price discovery is determined by demand-supply. Impose uniform power price is unrealistic. Like in USA, every Zip code is having different petrol prices based on demand-supply, so I goto cheapest one. This keep on balancing demand-supply. Govt wants to control energy for their political viability.
    Like 2
    • Sameer Garg @Sameer Garg
      Ye quickzotic govt hai . Takes kneezerk action then puts its foot in the mouth . JOKERS.
      Like 0

      • Comment Guidelines

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  • Vivek Sharma @Vivek Sharma
    This is called shooting on your own feet. Government has no business to poke their nose in free market. They just want energy to make political commodity. Mind you this is year of election preparation, and all this non-sense ideas would keep emerging in coming days. So stay away from such stocks.
    Like 1
  • Gulshan Sharma @Gulshan Sharma
    government back the design with in 1-2days then again fire the stock mark my word
    Like 1

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