IEX shares rebound 10% from 52-week lows. Here's what is pushing the stock after carnage

Shares of Indian Energy Exchange (IEX) surged about 4 per cent during the trading session on Monday, taking the total recovery to about 10 per cent from the 52-week low it hit during the previous trading session on Friday. Interestingly, a new-age entrepreneur has picked up a stake in IEX amid the carnage in the stock.

According to the data from National Stock Exchange, Harsh Anand Jain bought 52,95,000 equity shares, or about 0.6 per cent stake, in the company for an average price of Rs 124.82 apiece amounting to Rs 66.09 crore. Harsh Anand Jain is the co-founder and CEO of Dream Sports, the parent company of Dream11.

Shares of IEX settled 10 per cent lower to Rs 122.6 after hitting a new 52-week low at Rs 116.05. However, the stock has rebounded about 10 per cent from its lows to Rs 126.90 on Monday, thanks to its 4 per cent rise from the previous close. Its total market capitalization stood around Rs 11,200 crore.

Indian Energy Exchange is engaged in providing an automated trading platform for the physical delivery of electricity, renewables, and certificates. It offers various trade markets, such as the electricity market, green market and certificates. The electricity market includes the day-ahead market, term-ahead market, real-time market and cross-border electricity trade.

Global brokerage firm UBS maintained a 'buy' rating on IEX with a target price of Rs 200 per share citing that implementing market coupling in inter-regional transmission or green energy can help improve the management of transmission capabilities. On the other hand, Antique Stock Broking downgraded IEX to sell with a target price of Rs 105 in its report on Friday.

"Spot market prices will be higher than bilateral prices—unlike in the past which was favorable for exchanges; the possibility of a coupling operator can net the power flow within each zone—posing a new challenge for dominant exchanges like IEX; incentives by competitor exchanges—like HPX and PXIL, can eat into volume growth," said Antique.

In a YouTube video, market veteran Basant Maheshwari says a poor business model can make a good balance sheet bad and vice versa. He cited the Ministry of Power's recent decision to go ahead with market coupling, potentially negating Indian Energy Exchange (IEX) domination, and puncturing the business model of the company.

The IEX stock should underperform significantly going ahead," Maheshwari said while also suggesting investors consult their financial advisors before taking an investment decision and that his words are not advice to 'Buy' or 'Sell' stock. "Unless the government takes a U-turn, which I don't see in this case, the stock should be impacted," he said.

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