IEX’s share buyback decision to be taken in board meet today


Indian Energy Exchange’s (IEX) board of directors is scheduled to meet today i.e., on Friday to consider the proposal for buyback of equity shares of the company. IEX shares are down more than 43% in 2022 (YTD) so far.

“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,” the energy exchange had informed in an exchange filing earlier this month.

A share buyback, also known as share repurchase, is a corporate action to buy back its own outstanding shares from its existing shareholders usually at a premium to the prevailing market price. It can be an alternative tax-efficient way to return money to shareholders. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).

Indian Energy Exchange is the premier electricity exchange in India, which facilitates trading of electricity and commands a market share of 85-90% in the power exchange market.

IEX reported nearly 7% fall in its consolidated net profit at 71 crore in September quarter, compared to a year ago from 77.38 crore in the quarter ended on September 30, 2021. Total income declined to 113.7 crore in the quarter under review, as compared to 122 crore in the same period a year ago.

Meanwhile, the total trade volume of the energy exchange dipped over 11% to 23.1 billion units in the July-September quarter, compared to the year-ago period, due to supply-side constraints. The total trade volume of IEX was 26 billion units (BU) in July-September 2021.

During the quarter, the volumes declined by 11% YoY (year-on-year), as compared to Q2 FY22, impacted due to supply-side constraints, led by high prices of e-auction coal, imported coal and gas.

“Going ahead, easing supply-side constraints and lower demand in the impending winter season, an increase in liquidity on the exchange platform leading to reduction in prices is likely, which will provide opportunity to discoms to optimize their power procurement and commercial and industrial consumers to buy cheaper power,” the company stated.

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