BENGALURU, Oct 19 (Reuters) - Indian Energy Exchange (IEX) (IIAN.NS) soared 20% to a record high on Tuesday, after the energy trading platform said it would consider a bonus issue of shares, adding to nearly 24% of gains so far this month as demand for electricity ramps up.
Increased economic activity after the second wave of the coronavirus has resulted in a shortage in coal supply and driven up electricity demand, proving a boon for New Delhi-based IEX which controls 95% of the power exchange market.
IEX's plan to issue bonus shares, which will be considered at an Oct. 21 board meeting along with its quarterly earnings, comes on the heels of a 72% surge in its shares in the three months ended Sept. 30, significantly outperforming a 16% rise in the S&P BSE Power Index (.BSEPOWER).
"Over the next decade, with India increasingly looking at EVs (electric vehicles) and big companies like Tata Power focusing in that area, the demand for energy is going to rise, and IEX is rightly placed for this kind of outlook," said Gaurav Garg, head of research at CapitalVia Global Research.
Shares of Tata Power have risen 62% this month as of last close.
In its latest monthly update, IEX, which is used by power producers, distributors and corporates to buy and sell electricity, said electricity volume traded in October was 59% higher than a year ago.
A top court move earlier this month, which allows electricity to be traded as other commodities with forward contracts and derivatives on exchanges, would help boost volumes at power exchanges like IEX, ICICI Direct Research in a note.
About 33 million IEX shares traded by 0655 GMT, more than three times the 30-day average of about 11 million shares.
The stock, which has more than tripled in value so far this year, was trading 15.3% higher at 918.8 rupees.
Reporting by Vishwadha Chander in Bengaluru; Editing by Rashmi Aich
Our Standards: The Thomson Reuters Trust Principles.
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