Investors buy IEX after steep fall in past 2 sessions as UBS sees 58% upside in stock

After plunging 18 percent in the previous two days, Indian Energy Exchange (IEX) shares gained percent on June 12 as buyers bought the company. UBS has a 'buy' recommendation on IEX shares, with a target price of Rs 200, representing a 58 percent increase from today's high.

IEX was trading at Rs 124.35, up 1.43 percent, at 09:41 a.m. Even though market coupling and Market Based Economic Despatch (MBED) show a possible increase in power exchange volumes of 12-15 times, execution may be difficult due to complex settlement procedures.

According to UBS, applying market coupling in interregional transmission or green energy can help enhance transmission management of capacity.

There will be no modification to the existing structure with simple market coupling, which will influence the exchange of power operations, according to the brokerage company. However, UBS stated that it is aware of the danger and is going to keep monitoring it attentively.

Antique Stock Broking rated IEX shares to sell with a target price of Rs 105 last week.

Antique Stock Broking stated that the prospect of a coupling operator can net the power flow inside each zone, providing a new threat for dominant exchanges like IEX. Furthermore, it noted that incentives from competitor exchanges such as HPX and PXIL can cut into volume growth from competitor exchanges such as HPX and PXIL can cut through volume growth, it had noted. These issues prompted the brokerage firm to downgrade the power exchange stock's rating.

In an interview, the Head of Policy Advocacy and Vice President of Business Development at Hindustan Power Exchange (HPX), stated that the introduction of market coupling will result in IEX losing its monopoly.

India now maintains three power exchanges: IEX, HPX, and Power Exchange India Ltd (PXIL). PTC India, BSE, and ICICI Bank together promote the HPX power exchange in the Indian electricity sector.

He went on to say that market coupling is critical for other exchanges to grow their market share. Even IEX has raised concern about the need for market coupling discussions in spot power trading.