NSE drops plans to sell Power Exchange

The National Stock Exchange (NSE) has decided to call off the proposed sale of its power trading platform, Power Exchange India Ltd (PXIL).

This comes within months of the NSE finding a consortium of buyers ready to buy stakes in PXIL. The NSE had in January 2017, along with the National Commodity and Derivatives Exchange (NCDEX), voted to rid itself of “loss-making PXIL”. The bourse and the NCDEX collectively own 61 per cent in PXIL. The move came as the NSE was planning an initial public offer of equity.

“Currently, the shareholders of PXIL have decided to continue the business operations of the exchange. Also, all the existing shareholders are committed and working together to augment the business of the exchange. This has resulted in a turnaround of the company in the current year,” said the spokesperson of the NSE in an e-mailed reply. The spokesperson did not share supporting numbers to indicate a turnaround.

PXIL’s valuation, from some earlier filings, was estimated at ~2,000 crore. Officials said the valuation was an issue with the NSE after the listing of a competing power trading platform, India Energy Exchange (IEX), in October 2017. The IEX was listed at an offer price of ~1,600 a share, while PXIL was being valued at only ~3-5 a share. A source said the NSE board felt PXIL could be turned around and later offered for a better value.

The Kolkata-headquartered power trading licensee MPL System was leading a consortium of power companies and institutional investors to buy a stake in PXIL from NSE at close to 50 per cent.

Apart from the NSE and the NCDEX, other companies on PXIL’s board at the time of deciding to divest were GMR Energy, Tata Power, JSW Energy and three state-owned entities, Power Finance Corporation, Gujarat Urja Vikas Nigam and West Bengal State Electricity Distribution Company. Sources said of the board member companies, GMR Energy withdrew, to be part of the consortium buying a stake in the company. “After GMR gave up the membership, its renewable energy certificates (RECs) are handled by a third party. This hit sales on the exchange. Now, even the NSE stake sake is not happening,” said a person close to the development. A spokesperson of GMR Energy did not respond to phone calls.

The IEX is the only other power trading marketplace in the country. PXIL has only 2 per cent in this market, with its average daily traded volume of close to 3 million units. However, in the REC market, its share had risen to 49 per cent in 2015-16, from 23 per cent a year before.

PXIL’s losses had widened to ~245 million in 2015-16 from ~181 million a year before, according to the draft prospectus issued by the NSE.

The NSE had in January 2017, along with the NCDEX, voted to rid itself of “loss-making PXIL”. The bourse and the NCDEX collectively own 61 per cent in PXIL