According to Nuvama Institutional Equities, Indian Energy Exchange (IEX) is expected to face challenges in the near term due to three factors: the implementation of market coupling, a shift in power volumes away from the spot market to longer-duration instruments driven by high power prices, and rising competition. The brokerage firm has maintained a ‘REDUCE/SU’ stance on the stock with an unchanged target price of Rs 127.
The recent decline in the IEX stock price was triggered by reports stating that the power ministry has directed the Central Electricity Regulatory Commission (CERC) to implement market coupling in a timely manner. Market coupling refers to an independent third party collating all buy/sell bids and deriving a uniform market price across all exchanges. This development poses a potential threat to IEX’s dominant position as other exchanges could eat into its market share over time.
On Thursday, the IEX stock experienced a sudden crash, reaching an intraday low of Rs 135.40, down 8.97% from the previous close. It eventually closed 8.24% lower at Rs 136.50 on the BSE. The stock’s technical indicators suggest it is trading neither in the overbought nor in the oversold zone, with an RSI of 36.8. The stock exhibits low volatility, indicated by a beta of 1, and is currently trading below its various moving averages.
During the trading session, approximately 22.95 lakh shares of IEX were traded, amounting to a turnover of Rs 32.32 crore. The market capitalization of the company fell to Rs 12,266 crore.