Interview with IEX Chairman S N Goel:
He says that Market Coupling should be interpretated as that when you have different geographies to deal with, market coupling here will mean that you match demand and supply in different geographies. In Europe, they have done this by coupling different sources of power of 26 countries to match demand and supply. Already in India, there is only one market. So this coupling would mean to integrate all exchanges together but price discovery will happen on exchanges only. (E.g. Couple BSE & NSE). This will kill competition.
CERC has to decide whether to go ahead with it or not.
Impact on IEX: If it is implemented, then what is the construct of the sector going to be.
Market share has reduced from 94-95% to 88-89%.
https://twitter.com/cnbctv18news/status/1667013900842471424?s=48&t=t9l2tt00PV7ie4i_OcyBnA
Reason why we sold IEX today at a loss:
On June 2nd, 2023 circular from Ministry of Power directed CERC to undertake the process of Consultation & Implementation of Market Coupling. This means that there will be a government entity which will do the price discovery based on which power will be dispatched on platforms like IEX, HPX and PTIX. This would dry up volumes. Currently, IEX is the most trusted platform for electricity spot price determination in India, which is its business moat. Now as price discovery will be done by the government, IEX will merely remain a platform to match bids with asks.
This will affect IEX revenues and profitability.
| Subscribe To Our Free Newsletter |
