Power trading company Indian Energy Exchange (IEX) is all set to begin its initial public offer (IPO) today. The IPO has gained the favour of analysts with most of them recommending subscription in the short to medium term. Equity shares of IEX are priced in the band of Rs.1,645 to Rs.1650, and the company is offering about 60.65 lakh shares or 20% of its paid-up capital for this IPO.
As a part of this IPO, some of the company’s existing shareholders including Tata Power Company Ltd. and Aditya Birla Private Equity Trust will offer their equity shares for sale. Tata Power is fully exiting the company by selling its entire 1.25 million shares in this IPO.
The IPO, which begins today, will be open for three days till October 11. IEX expects to raise about Rs.1,000 crore from this IPO by selling its shares at the upper band of the price offer. Moreover, the upper end of the price offer values the whole firm at Rs.5,000 crore. Equity shares of the company will be listed in both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Of the total equity shares allocated for this IPO, only 35% will be available for retail and individual traders. About 50% of the shares are reserved for qualified institutional bidders, and the remaining 15% is reserved for non-institutional bidders.
Indian Energy Exchange, a company regulated by the Central Electricity Regulatory Commission, enjoys near monopoly in India’s power trading industry. The company deals with a range of electricity products, and it brings together different players including government-owned power generation agencies, independent power producers, institutional power consumers, distribution plants, etc. For the fiscal year 2017, nearly 95% of the total power trading in India was conducted through IEX.
The company has reported strong financials over the last few years. It has reported a 13% growth in net profit to Rs.113.65 crore for the fiscal year 2016-17. Moreover, its revenues increased 18.6% to Rs.237.4 crore for the same period.