Ministry of Power (MoP) has recently announced its decision to go ahead with market coupling. MoP has directed CERC to expedite the consultation process and finalise implementation. Impact: Big negative for IEX.
Currently, IEX is the most trusted platform for electricity spot price determination in India, which is its business moat. However, introduction of a full-fledged market coupler implies an independent third-party will collate all buy/sell bids and derive a uniform market price across all exchanges. This potentially negates IEX’s ‘moat’, as other exchanges can eat into its market share over time. We reiterate our BRAVEHEART ‘REDUCE’ rating on the stock with a TP of Rs 127.
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