Sorry, that’s a typo from my side. To correct myself – In case of a MCO in place, all transactions occur on MCO while the role of IEX will be primarily not of price discovery but just collection of buy/sell bids.
I can comment on your a) and b) questions, may not be the answer. If MBED(Market Based Economic Dispatch) is implemented, in which case all power trading must happen via the power exchange. you can ignore all the reasons for moving towards exchanges like – “uncertainties on fuel supply side and pricing on one hand and push towards renewables and operations optimization”. In one fell swoop, this will move all power trading to happen via exchanges. And when this happens, there is one MCO who is the ‘sole exchange’ and several brokers like IEX, PXIL and HPX. With this surge in volumes, and way lesser uncertainty in terms of business regulations, there could be many more players who could be interested in entering the business.
About commanding higher multiples, exchanges always will command a higher multiple because there is a great room for innovation, they can come up with newer products, like derivatives for example which can add significantly to existing revenues. But here that would be the MCO and not IEX. IEX, as they say, is as of today NSE + Zerodha rolled into one but after MCO implementation it will become just like Zerodha and their success will be linked to things like how well they manage the commissions and UX(user Interface) rather than adding newer innovative products, and hence a lower multiple.
The reason I couldn’t form conviction to buy IEX is the number of uncertainties around it. Just take the MCO and MBED, you really cannot reliably build a bull or bear scenario without knowing if and when they will be implemented. Two many key variables in the equation.
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