The board of directors of Indian Energy Exchange (IEX) is scheduled to meet today, Friday, to consider a proposal to buy back the company’s equity shares. So far in 2022 (YTD), IEX shares are down more than 43%.
A share buyback, also known as a share repurchase, is a corporate action in which a company buys back its own outstanding shares from existing shareholders, typically at a premium to the market price. It may be a more tax-efficient way of returning money to shareholders. Share repurchases reduce the number of shares in circulation, which can raise the share price and earnings per share (EPS).
The Indian Energy Exchange is India’s premier electricity exchange, facilitating electricity trading and commanding a market share of 85-90% in the power exchange market. IEX reported a nearly 7% drop in its consolidated net profit to 71 crores in the September quarter, down from 77.38 crores in the quarter that ended September 30, 2021. Total income fell to 113.7 crores in the current quarter, down from 122 crores in the same period last year.
Meanwhile, due to supply-side constraints, total energy exchange trade volume fell more than 11% year on year to 23.1 billion units in the July-September quarter. IEX’s total trade volume in July-September 2021 was 26 billion units (BU). Volumes fell 11% YoY (year on year) in the second quarter of FY22, owing to supply-side constraints caused by high e-auction coal, imported coal, and gas prices.
Indian Energy Exchange (IEX) shares rose 3% in Friday trading ahead of the company’s board meeting to consider a share buyback plan. Prabhudas Lilladher (PL), a brokerage firm, predicts that IEX shares will reach 175 in the near future. According to Vaishali Parekh, PL’s Vice President of Technical Research, the stock has been consolidating for quite some time but has indicated a Triangular Breakout. Moving past the significant 50EMA level of Rs 146 has improved the trend, she said, adding that the scrip will rise further in the coming days.
On the BSE, the stock rose 2.78 percent to a high of Rs 151.15. Shyam Sekhar, a market veteran, recently wondered on Twitter whether the company’s board was failing minority shareholders. According to Sekhar, IEX’s recent 2:1 bonus issue reduced shareholder value. He stated that the bonus issue failed, and he is concerned that the buyback will also fail.
126 total views, 1 views today