Indian Energy Exchange closes due to fears of increased competition by new pricing rules

Investors grew worried that a planned overhaul in electricity pricing would increase competition and erode IEX's dominant position on the market.

IEX, India's most popular platform for determining spot electricity prices, is under pressure from the power regulator as it prepares to implement market coupling in January, in a gradual rollout.

Other power exchanges can also play a role as market couplesrs under the new system. This will challenge IEX’s central position.

Stocks were on course for their seventh session of consecutive losses. They also posted the worst intraday single day performance since their listing in 2017.

Market coupling is a model of economics used on energy markets in order to create a uniform, single price for electricity across multiple trading platforms.

Bernstein says that the order is "worse than what we built in", and IEX will likely feel its impact on market share. The brokerage has reduced its target price from 160 rupees down to 122 rupees, maintaining a "market-perform" rating. This is to "reflect the full impact of market coupling".

According to data compiled and analyzed by LSEG, IEX stocks are rated on average "buy", with a median target price 215 rupees.

As of 1019 local, shares of the company had fallen 15% to 159.7 rupees. (Reporting by Hritam Mukherjee in Bengaluru; Editing by Nivedita Bhattacharjee)

(source: Reuters)