August 29, 2017

Indian Energy Exchange all powered up to launch IPO by December

The Economic Times

MUMBAI: Private equity-backed Indian Energy Exchange (IEX) aims to hit the capital market with its initial public offering before December, which would make it the first energy exchange to be listed in the country, managing director Satyanarayan Goel said.

Earlier this month, the bourse received approval from capital market regulator Securities and Exchange Board of India for its IPO. The issue will be an offer of shares for sale from existing investors. While most investors are trimming their respective shareholding, Tata Power Company will be exiting its investment.

“We will be in the market with the IPO in the third quarter of 2017-18. Dalmiya Cement Bharat and TVS Capital are not selling any shares and would continue to be our largest shareholders,” said Goel, who is also its chief executive.

Dalmiya Cement Bharat owns 15% and TVS 10% in the exchange. Other investors, such as Aditya Birla Group’s private equity arm, Madison India Capital, and Renuka Ramnath-led Multiples Alternate Asset Management would be paring their holdings.

India currently has two operational power exchanges which provide generators and buyers with a platform for short-term trades, in the dayahead market: IEX and the National Stock Exchange-promoted Power Exchange India.

IEX, originally promoted by Jignesh Shah-led Financial Tech, was sold off to private equity firms on the behest of Central Electricity Regulatory Commission after group company National Spot Exchange got embroiled in a scam related to non-settlement of trades worth Rs 5,600 crore.

While share of electricity traded through exchanges has increased from 2% of total generation in 2014 to 10% now, with IEX claiming 35% of it, price of short-term power has declined due to muted demand. “In last nine years we have grown at a CAGR of 35% and our bottom line growth has been around 14%. So far we have been operating in a distorted market...but now there are enablers in place and we are sure of big growth,”