Hey guys,
Want to get some views on #IEX and implications of market coupling on the energy exchange situation in India..
Currently, IEX has 84% of the market share, which is supposed to drop to 70% when market coupling gets implemented.
Fundamentally IEX is great, it is just about the future estimation of growth where the Questions are arising.
What is Market coupling?
Market coupling is a model where buy and sell bids from all power exchanges will be aggregated and matched to discover a uniform price, meaning there will only be one price for the electricity that is to be traded at any point through these exchanges.
So basically there will be one platform and one price, which is an aggregate of the exchanges that exist in India. This would dilute IEX's monopoly power
The market coupling has been getting delayed and won't be implemented for atleast another year. This has also led to rerating of the stock in the short term.
IEX stock had seen a rally but has corrected amid the last market correction..
My questions/things to address:
- Given it will take time to implement market coupling, IEX has more time to gain more market and strengthen its position?
- IEX is also dabbling in other markets - coal, gas exchanges as well. How big are these opportunities
- Given that the market coupling gets introduced, but India's electricity share that will trade on an exchange is still set to grow for the next 10 years. If the sector is still going to grow, but the profit share has reduced slightly -is IEX still a good investment?
All views appreciated!
some reading materials:
