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EXCLUSIVE: NSE to pick up 26% stake in Indian Gas Exchange

The exchange is considered to be an alternative to the gas spot markets in India that provides ease of trading, payment security, and greater access to the market for its users.

February 11, 2021 / 02:11 PM IST
Indian Energy Exchange | Westbridge Crossover Fund LLC sold 18,65,329 shares at Rs 165 per share. (Image: Moneycontrol)

Indian Energy Exchange | Westbridge Crossover Fund LLC sold 18,65,329 shares at Rs 165 per share. (Image: Moneycontrol)

After Adani Total Gas, Torrent Gas, and Gail (India) acquired 5 percent stake each in the Indian Gas Exchange (IGX), an arm of the Indian Energy Exchange (IEX), National Stock Exchange (NSE) is likely to acquire at least 26 percent stake in IGX.

According to a source aware of the development, the NSE board has already given clearance to this proposal and has approached markets regulator SEBI in this regard. In the Adani Total Gas, Torrent Gas, and Gail deals, the value of the transactions was not available for the public.

The source added that deal has also got a go-ahead from the Petroleum and Natural Gas Regulatory Board (PNGRB) and is in an advanced stage.

IGX is a gas trading platform started by IEX on June 15, 2020, and has been operating as the Gas Exchange since December. IGX is India’s first gas exchange and had got the authorisation from PNGRB based on the Gas Exchange Regulations 2020, notified recently.

“Though the initial plan by NSE was to set up a gas exchange, for which SEBI had already given a nod, it is now looking to pick up 26 percent in the established IGX,” the source said. An IGX official declined to comment on the development.

The exchange is considered to be an alternative to the gas spot markets in India that provides ease of trading, payment security, and greater access to the market for its users. At present, there are around 15 members and 15 members and more than 500 registered clients under IGX.

The platform provides a neutral and transparent marketplace to multiple buyers and sellers to trade in spot and forward contracts at designated physical hubs. It currently operates from three physical hubs –Hazira and Dahej in Gujarat and KG Basin in Andhra Pradesh.

It was on January 22, 2021, that IEX had announced the strategic investments by Adani Total Gas and Torrent Gas in IGX. Later on February 9, GAIL too joined as a strategic partner.

India has plans to increase the share of natural gas in its energy basket from 6 percent now to 15 percent by 2030. IGX is considered to be a key step towards this and a move towards ensuring a market-driven pricing mechanism.
Shine Jacob
first published: Feb 11, 2021 01:08 pm