IEX surges 3.5% as total electricity volume jumps 21% in August

IEX shares have slipped nearly 9 percent in the past three months.

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Shares of Indian Energy Exchange soared 3.5 percent in early trade on September 5 as the company recorded strong growth in total electricity volumes over the month of August.

The company saw a 21 percent on year jump in total electricity volumes to 8,469 million units in August. The month under review experienced the lowest monthly rainfall since 1901, resulting in hot weather conditions that led to a surge in electricity demand, the company stated in an exchange filing.

Moreover, energy demand reached an all-time peak of 236 GW on August 31 along with the highest-ever single day energy consumption of 5,126 million units.

Aided by the combination of higher demand and supply constraints, the company also recorded a 33 percent on year rise in prices to Rs 6.89 per unit on the Indian Energy Exchange during August.

At 10.21 am, shares of Indian Energy Exchange were trading around a percent higher at Rs 138.10 on the National Stock Exchange. Trading volumes were also strong as one crore shares changed hands on the exchanges, higher than the one-month daily traded average of 84 lakh shares.

Real-time market (RTM) volumes also jumped 21 percent year-on-year to 2,738 million units in August. The company also achieved its highest-ever single day volume of 135.28 million units in RTM on August 24.

The RTM segment enables distribution utilities and industries with greater flexibility and efficient optimisation of portfolios by balancing their power demand-supply on a real-time basis.

The financials

The company had recorded a 10-percent on year rise in consolidated net profit to Rs 75.82 crore in the April-June quarter on the back of a near 6 percent jump in revenue.

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Despite the robust trends, concerns over the Central Electricity Regulatory Commission's plan to initiate market coupling have weighed on the shares of IEX in recent times. Brokerage firm Nuvama Institutional Equities also pointed out that with the Ministry of Power's directive to introduce market coupling, IEX may lose its business ‘moat’ (best platform for price discovery). "This implies that IEX may potentially concede market share to other exchanges over time," the brokerage stated in its report.

Accordingly, shares of the company have also slipped around 9 percent over the past three months.

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