Stormy boom in IEX shares, JM Financial said buy, price may increase now

Today there was a special movement in the stock market and that was a tremendous jump in IEX i.e. Indian Energy Exchange shares. The company’s shares rose to about 6 percent. The reason for this is the report of JM Financial, in which he has given a BUY rating on IEX and has fixed a target price of Rs 231 for this. That is, expecting an increase of about 14 percent from the current price.

Demand for rising electricity, opportunity for IEX

The report of JM Financial says that the demand for electricity in the country is continuously increasing and along with this, exchange-based transactions in the market are also increasing rapidly. Between FY25 to FY28, the volume traded on IEX can increase at a rate of 13 per cent annually. With this, the company’s earnings and profits are also expected to increase by 14-16 percent.

Short-Term Power Market Frequent Growth

The short-term electricity market, which currently is only 7 per cent of the total electricity production, is growing at the rate of 18 per cent, while the total demand is increasing at the rate of just 5-6 per cent. JM Financial believes that many states are turning to purchasing short-term electricity due to increasing stake of renewable energy (Re), new tools like virtual PPA and changing weather. In this environment, IEX can benefit the most as it already covers 84 percent of this market and has been constantly connecting customers through new products and best technology.

Discussion of market coupling, but relief at the moment

The report also said that regulators (such as CERC) are thinking of bringing market coupling, so that the supply of electricity and prices can be controlled centrally. But according to JM Financial, market coupling will not be fully implemented in the near future, which is a relief for IEX.

IEX’s business model and strength

IEX is not just an electricity trading platform, but it also offers many innovative products like Re Certificates and Energy Saving Certificates. It is continuously maintaining its leadership with its 84 percent market share and more than 7,900 participants.

In FY24, IEX first crossed the 100 BU (billion units) figure. In May, the company traded 10,946 MU’s electricity volume, which was 14 per cent higher than last year. The Real-Time Market (RTM) has recorded a monthly trading volume with a great gain of the largest, 42 per cent ever.

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