The National Stock Exchange (NSE) has decided to call off the sale of its power trading platform Power Exchange India Limited (PXIL). The move comes within months of NSE finding a consortium of buyers who were ready to pick up a stake of NSE at a nominal rate.
In an extraordinary general meeting (EGM) held in January 2017, NSE along with the National Commodity and Derivatives Exchange (NCDEX) had voted to shut down “loss-making PXIL”. NSE-NCDEX collectively own 61 per cent stake in PXIL. The move was in light of NSE planning to float its initial public offering (IPO).
PXIL’s valuation according to some past submissions is estimated to be around Rs 20 billion. Officials said valuation of PXIL was an issue with NSE post the listing of competitor power trading platform India Energy Exchange (IEX) in October, 2017.
IEX was listed at an offer price of Rs 1,600 per share, while PXIL was being valued at Rs 3-5 per share, which was too low as compared to IEX. The executive said the NSE board was of the view that PXIL can be turned around and be offered for a better value later.
Kolkata-headquartered power trading licensee MPL System Limited (MPL) was leading a consortium of power companies and institutional investors to buy the majority stake from NSE of close to 50 per cent.
“Currently the shareholders of PXIL have decided to continue the business operations of the exchange. Also, all the existing shareholders are committed and working together to augment the over the business of the exchange.
This has resulted in a turnaround of the company in the current year,” said the spokesperson of NSE in an emailed reply.
The spokesperson did not share supporting numbers to indicate the turnaround.
Apart from NSE and NCDEX, the companies that form part of the PXIL board are, GMR Energy, Tata Power, and JSW Energy, state-owned Power Finance Corporation, Gujarat Urja Vikas Nigam Limited (GUVNL) and West Bengal State Electricity Distribution Company.
Sources said of the board member companies GMR Energy gave up its membership to be part of the consortium picking up stake in the company. “After GMR gave up the membership, its renewable energy certificates (RECs) are handled by a third party. This hit the sales on the exchange. But now even NSE stake sale in PXIL is not happening,” said a person close to the development. A spokesperson of GMR Energy did not respond to phone calls.
Apart from PXIL, IEX is the only other power trading marketplace in the country. PXIL has only two per cent in the power trading market, with average daily traded volume of close to three million units. However, in the Renewable Energy Certificates market, its share had risen to 49 per cent in 2015-16, from 23 per cent a year before. On 21 February, the market clearing volume at PXIL stood at zero, while the REC cleared during last session in January was 1 million units.
PXIL’s losses widened to Rs 245 million in 2015-16 from Rs 181 million years before, as per the draft prospectus submitted by NSE. The power trading volume at PXIL is close to nil and it has a market share of barely 2 per cent, lion’s share being with IEX.
Source: business-standard
