IEX shares in a
free fall, tank another 15% to fresh 52-week low; what's dragging the stock, and should you buy?
Produced by: Harshita
Designed by: Mohsin Shaikh
Indian Energy Exchange (IEX) fell 15% on Friday to touch a fresh 52-week low of Rs 116 on NSE. IEX shares ended with a loss of around 8.5% at Rs 136.45 to on NSE. The stock of the country’s premier energy exchange has tanked 22% in the past two trading days
IEX share price today
iex share price today
The stock fell after some analysts took note of a circular stating that the Power Ministry directed the Central Electricity Regulatory Commission (CERC) to undertake the process of consultation and implementation of market coupling in a timely manner
Why IEX shares are falling?
Market coupling refers to the process of forming of a single power trading entity owned by the government where price discovery will happen with power getting dispatched to short-term power trading platforms including IEX among others
What is market coupling?
The market coupling mechanism will bring uniformity in power pricing, which, according to analysts, may impact IEX negatively in terms of dominance and price difference. The move is likely to allow more exchanges to enter the market, which will increase competition for IEX
Impact of market coupling
According to analysts, IEX is a market leader and has the highest volumes in terms of power trading. As per experts, market coupling will dry up volumes in a significant manner for IEX among other power trading platforms, which led to a crash in the IEX stock
Market coupling effect
on IEX
In past one week, IEX share price has slipped 24%, compared to an 0.8% rise in the benchmark Nifty 50. The stock fell below its previous low of Rs 125.75, touched on March 29, 2023
IEX share price history
Shares of Indian Energy Exchange (IEX) are likely to face near-term headwinds from three factor - Implementation of market coupling, high power price-driven shift in power volumes away from spot market to longer-duration instruments, and rising competition
Headwinds for IEX stock
In terms of technicals, the relative strength index (RSI) of IEX stands at 36.8, signaling it's trading neither in the overbought nor in the oversold zone. The stock has a 1-year beta of 1, indicating low volatility. IEX shares are trading lower than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages
IEX share technicals
Nuvama Institutional Equities maintained a 'Reduce' stance on IEX shares with an unchanged target price of Rs 127. Meanwhile, Abhijeet from Tips2trade told BT that IEX stock has next support at Rs 132.7 on the Daily charts. “Till daily close above resistance of Rs 140.6 is not achieved, investors should not buy at current levels,” he said
Should you buy IEX shares?
Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today. Investors should consult their financial advisors before taking any position