Investors never took fancy to the Indian Energy Exchange Ltd (IEX) stock in the secondary markets since it was already priced at a premium in the initial public offering. Besides, its high dependence on one product segment—the spot electricity market, was also a worry. Compared to the 8% rise in the Nifty 500 index, the stock lost 9% since its listing in October 2017. The stock underperformed, even though the firm delivered decent earnings.
There now seems to be another reason for the stock to underperform. Volumes in the so-called day-ahead market on the exchange are down 13% in the first two months of FY20 (April-May). In the previous two fiscal years, volumes in this segment grew 14-22%. The day-ahead market is a key business segment for IEX, generating a majority of the volumes.
