IEX monopoly under threat, heres why!

One of such companies that comes first to mind when we talk about moat is Indian Energy Exchange Ltd (IEX).

Good market condition or poor market condition, ‘risk on’ or ‘risk off’ mood in the market i.e. the hunt for quality stocks is always on. One of the most popular investment terminologies used while identifying quality stocks is ‘stocks with an investment moat’.   

In the business world, any company with a superior moat will always tend to be safer relatively and hence, profitable in the long-term, devoid of competitive pressure, relatively speaking. Such companies with bigger safety arrangements are also known as companies with investment moat.   

One of such companies that comes first to mind when we talk about moat is Indian Energy Exchange Ltd (IEX). IEX is India’s power trading platform, which enables efficient price discovery and offers participants, the opportunity to trade in a variety of energy products. The company holds about a 98 per cent monopoly on the total-traded power in the country.   

However, there is a new twist in this tale now and that is the emergence of the new power exchange in the country - Hindustan Power Exchange (HPX). Backed by BSE and Power Trading Corporation (PTC), HPX was launched mid-week; the operations of which were commenced upon receiving all necessary approvals from Central Electricity Regulatory Commission, after being floated in 2019.   

PTC India and BSE Investments hold approximately 25 per cent each in HPX, followed by 9.9 per cent held by private sector lender ICICI Bank.   

With the commencement of HPX, it becomes the third power exchange in the country. The exchange is backed by the latest technology and a series of innovative features. It will initially offer trading in contingency contracts, green contingency contracts, and renewable energy certificates. It will slowly and steadily increase its product portfolio and provide a wide range of contracts to address the demand of different segments of the electricity market.   

Interestingly, in one of the interviews, Akhilesh Awasthy, Chief Operation Officer at HPX said, “We would be able to challenge the monopoly of existing platforms in no time.”  

Would you continue to hold the stock? Share your thoughts in the comments section.

10 comments on article "IEX monopoly under threat, heres why!"

Bhojanna Uddanna

Yes, let me not come to conclusion. HPX is new entrant it may need some time to challenge the monopoly.

7/8/2022 7:57 PM

Murthy

HPX may garner some business(PTC deals). IEX will be able to manage it business in medium term well further its business extention plans to other countries,gas exchange will allow its business to prosper in the long run. It is like BSE and NSE . Both exchanges are doing well. So don't sell your shares and accumulate. It is my personal opinion.

7/9/2022 8:21 AM

Murthy

HPX may garner some business(PTC deals). IEX will be able to manage its business in medium term well , further its business extention plans to other countries,gas exchange will allow its business to prosper in the long run. It is like BSE and NSE . Both exchanges are doing well. So don't sell your shares and accumulate at dips. It is my personal opinion.

7/9/2022 8:25 AM

TANJEET SINGH

Earlier HERO MOTORCYCLE had monopoly, Later on Bajaj, TVs, Honda, Yamha, Suzuki came in competition,But with increasing competition HERO managed it very Weill. Market leader will always number 1 what ever the Field.

IEX will.manage to compete HPX with their huge network and vast experience

7/9/2022 10:51 AM

P.P. Janardhanan Nair

I don't think there is immediate threat to IEX. They will do well as hitherto. Will think of offloading the shares after seeing next 1 year result. P P JANARDHANAN

7/9/2022 11:20 AM

Aadesh Sikchi

IEX share will be range bound.New entrants will enter with price discounts,similar to telecom

Rgds

7/9/2022 12:46 PM

Srikanth Gandhi

Old is gold. The Govt target to trade power exchange to 25 percent in coming days. HPX is a child.

7/9/2022 10:11 PM

Satyajit Shah

Market share of IEX may decrease , but their market leadership will remain. Unique example is of LIC. After entry of of private insurance companies, still LIC is a market leader.

7/10/2022 7:41 AM

Dhiren Shah

I think competition will make existing company more alert and strong than monopolistic company.

Nothing will remain permanent.

If IEX has to be no-1, they will definitely think the policy change and method of doing business.

7/10/2022 11:08 PM

Victor

To track Power Exchange (IE,X, PXIL and HPX) daily performance & volumes, check https://powermarkets.in/

7/27/2022 1:17 PM

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