The Indian Energy Exchange or the IEX is an Indian electronic system power trading exchange that runs on the regulations of the Central Electricity Regulatory Commission. IEX is also the largest energy exchange all over India with a physical delivery option, as part of its electricity trading. IEX at present has over 3800 clients and 3300 electricity consumers.
According to the current announcements, the total traded electricity volume by the Indian Energy Exchange, which directly impacted the IEX share price, witnessed a massive growth with values jumping up to 59% in September 2021, along with a minimum of trade of 8997 MU volume of electricity.
In an interview, the vice-chairman at GCL securities Mr. Ravi Singhal exclaimed that one of the prime reasons why the IEX share price is rising is because of the expected announcement of a bonus in the near future. However, there have been plenty of other major contributing factors that have resulted in this sudden jump of 59% in the IEX share value. Let us discuss some of them below to better understand why the IEX share price is rising and hence, is the one to invest in, given the current statistics since June 2021 quarter.
#1 Cross Border Electricity Trade (CBET)
With a 37% growth in the power trading segment, IEX manage to trade around 7322 mega unit volume of power in July 2021, with a monthly average price of Rs.2.95 for every unit. Along with this increasing volume growth of 37%, the introduction of the cross-border electricity trade further increased the aggregated traded volume by approximately 68.4% on a month-to-month basis. This is another reason that might have increased the IEX share price gradually, resulting in the master 59% jump in September 2021.
#2 Green Energy Theme
The Indian Energy Exchange has now successfully become a platform for the physical trading of renewable energy, making it an active part of the green energy theme movement. According to IEX hence, there will be four different types of green term ahead contracts available for trading that include daily contracts, weekly contracts, green intraday contracts, and day-ahead contingency contracts. Because of this decision, IEX stock is in the limelight, directly impacting the IEX share price and increasing its value, as witnessed in September 2021.
#3 Big Returns
According to the National Stock exchange, the Indian Energy Exchange has managed to successfully give a massive return of 165% since it stepped foot into the exchange market a year ago. At present, IEX share price has increased greatly to Rs. 758.50 from Rs. 434 on 27 August 2021. This makes IEX a prominent and dominating player in the business, justifying the current share price, while actively working towards increasing the same in the near future.
#4 Distribution Utilities’ Increasing Demand
The Adani Mundra power plant and the Tata power plant together with a capacity of 8000 MW of electricity are all set to sell in Gujarat to ease out the supply of coal situation in the state. For the same reason, the bids on the current power exchange are high that is simultaneously decreasing the power prices, to a great extent. Now, due to the desperate demand by the distribution utilities for power, the average price per unit has increased from Rs. 2.95 per unit to a massive Rs. 6/7 per unit, making Gujarat the biggest buyer of power from IEX. This is one of the reasons why the IEX share price has been witnessing rapid growth in the last few months, since July 2021.
#5 Profit Growth
According to data and research, the June 2021 quarter has been the most profitable for IEX with the consolidated profit, which is a whopping 47% increase from the last quarter. The main reason for this massive increase in profit is due to the increased revenues of the power exchange at approximately 1 billion rupees for the period of April to June 2021. This increasing revenue and market value together contributed to the overall increase in the IEX share price in September 2021.
#6 Growth in Power Consumption
The global pandemic shut down operations for a lot of the major industries in the country. However, even with the lockdown situation, the consumption pattern of electricity throughout the quarter witnessed a massive growth of 17%. In June 2021, the increasing demand of power reached 191.5 gigawatts, which further increased the demand for power for consumption in July 2021, peaking at a huge 200 GW consumption demand requirement. Now, because of this growth in power consumption, the IEX share price is seen to be growing by a huge margin.
Overall, the IEX share price, at present stands at Rs. 758.50/-, showcasing the popularity of this power trading business entity amongst the distribution utilities. Additionally, according to experts, the IEX share price is only expected to increase further, given the new adoptions within the business, including green energy distribution, which might just be one of the best decisions taken by the Indian Energy Exchange.
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