Electricity Exchanges – Growth Returns Amid Vortex Of Uncertainty: ICICI Securities

ICICI Securities Report

Electricity exchanges reported a growth print of 18% in FY24, after a sluggish growth of 2% in FY23. Exchanges volume grew by two times of demand print of 8% in FY24. IEX reported a decline in market share of 85% (-200 basis points YoY) as the new exchanges HPX gained 400 bps market share in the fiscal.

However, the year was characterised by noises around market coupling. Note that the imposition of market coupling can erode the competitive advantages of incumbent.

The regulator, directed by central government, initiated discussion on the raison d'etre of market coupling The last word is yet to be spoken on the market coupling.

As a result, the uncertainty will continue to plague the sector. Short term market is ~15% of total market and exchanges comprises 38% of total markets.

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