IEX board to consider buyback proposal on 25 Nov

Market


Indian Energy Exchange (IEX) will consider a buyback proposal on November 25. IEX is India’s premier energy marketplace, an automated trading platform for the physical delivery of electricity, renewables, and certificates. On Friday, IEX shares closed on a flat note.

In its regulatory filing, IEX said, ” a meeting of the Board of Directors of the Company is scheduled to be held on Friday, November 25, 2022, inter-alia, to consider a proposal for buyback of fully paid-up equity shares of the Company.”

On BSE, IEX shares closed at 138.40 apiece down by 0.5%. The shares had touched an intraday high and low of 140 apiece and 137.50 apiece respectively.

At the current price level, IEX’s market valuation is around 12,437.59 crore.

In general terms, buybacks are a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than the market price. When the company buys back, the number of shares outstanding in the market reduces.

As per the BSE website, among the many advantages of buybacks are — to improve earnings per share; improve return on capital, return on net worth, and enhance the long-term shareholder value; provide an additional exit route to shareholders when shares are undervalued or are thinly traded; enhance consolidation of stake in a company; return surplus cash to shareholders; achieve optimum capital structure; and to support share price during periods of sluggish market conditions, among others.

During the second quarter of FY23, IEX posted a consolidated net profit of 71.20 crore — lower than 77.39 crore in Q2FY22 —- however better than 69.13 crore in Q1FY23. Consolidated total income stood at 113.77 crore in Q2FY23 compared to 122.30 crore in Q2FY22 and 113.39 crore in Q1FY23.

As of September 30, 2022, IEX has cash and cash equivalents of around 77.85 crore compared to 224.16 crore as of September 30, 2021.

The company’s earnings per share (EPS) are around 0.78 as of September 30, 2022.

This year, IEX shares have corrected massively. Year-to-date, IEX shares have dipped by more than 46% on BSE. It was around 258 apiece on January 3, 2022.

Meanwhile, between November 14 to 18, the shares plunged by over 4% on Dalal Street.

Last month, IEX achieved 7972 MU volume including Green Power trade of 403 MU, and 3.58 lac RECs (equivalent to 358 MU). It said, the total volume on the Exchange in October’22 was lower by 13% on YoY basis due to the high volume base of last year, and lower by 2% on MoM basis due to reduced REC trading.

Earlier, on November 4, IEX in its monthly performance update, said that going forward, “further correction in prices due to improvement in coal availability and reduction in demand due to onset of winters, will provide opportunity for cost optimization by Discoms and Open Access consumers, resulting in increased volumes on the Exchange.”

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