Indian Energy Exchange shares extend losses, crash 10% today. Here's what the company has to say

Shares of Indian Energy Exchange Ltd continued their sharp fall on Friday amid heavy volumes. The stock slumped 14.98 per cent to hit an intraday low of Rs 116.05 over its previous close of Rs 136.50. It eventually settled 10.18 per cent lower at Rs 122.60. At today's closing price, the scrip has dived 17.58 per cent in just two sessions. Around 1.10 crore shares changed hands today on BSE, which was more than 16 times compared to the two-week average volume of 6.51 lakh shares. Turnover on the counter stood at Rs 134.76 crore, commanding a market capitalisation (m-cap) of Rs 11,017.69 crore.

The steep fall in share price could be related to the Central Electricity Regulatory Commission's plan to initiate market coupling. The power ministry has reportedly asked the CERC to start a market coupling process of multiple electricity exchanges, with an aim to make prices uniform across exchanges.

In response, Rohit Bajaj, Head - Business Development, Strategy and Regulatory Affairs at IEX, told Business Today, "India has today a voluntary market framework where all exchanges have equal opportunities. Market coupling is done to couple different markets operating in different geographies which is not applicable in our case. In India, all the regions are already coupled and we have one market and one price. The government has requested CERC to initiate the process of consultation and finalisation of a construct. I am confident that all aspects, such as the objective of coupling and need in the current market framework, will be examined."

On the technical front, analysts largely felt that the stock looked 'bearish' and suggested investors not to enter at current levels.

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Sameet Chavan, Head of Research, Technical and Derivatives at Angel One, said, "IEX is an Indian electronic system-based power trading exchange regulated by the Central Electricity Regulatory Commission (CERC). The stock has been a laggard for the last 15-odd months. Stock prices tumbled in the last couple of sessions after the reports said that the power ministry has directed the CERC to undertake the 'Market Coupling' mechanism for spot power trading. Technically speaking, we do not see any near-term relief in the prices as the decline is backed by humongous volumes. The stock is trading at a new two-year low and hence, we advise traders to stay away from the stock till things do not stabilise."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Since last two years on a weekly scale, the said counter has made lower highs and lower lows structure which resulted into 60 per cent cut in price. For now, avoid IEX since its structure of weekly chart is extremely bearish and there is no sign of any recovery."

Ravi Singh, Vice-President and Head of Research at Share India, said, "The fall is directly linked to CERC's decision to introduce of 'market coupling mechanism' that will bring competition for IEX in the future. We may see a further decline in stock price. Investors should wait till the dust settles."

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AR Ramachandran from Tips2trades said, "Market coupling mechanism introduced for spot power trading by CERC which will see better and lower pricing for consumers in general has led to a sharp fall in IEX stock prices with next support at Rs 103 on the daily charts. Till a daily close above the resistance of Rs 136.45 is not achieved, investors should not buy at current levels."

Meanwhile, Indian equity benchmarks today extended their fall for the second straight session. The domestic indices were dragged by consumer, technology, metal, state-owned lenders, automobile and energy stocks.

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