Indian Energy Exchange Ltd (IEX) is gearing up to go public, three people close to the development said. The listing is likely to provide an exit option to PTC India Ltd and Financial Technologies (India) Ltd (FTIL). Founded in 2008, IEX is an electricity bourse in the country. Since its inception, the exchange has launched several products like renewable energy certificates, energy saving certificates and day-ahead market among others.
An IEX official confirmed the development on condition of anonymity. "The timing and IPO (initial public offer) size, however, is yet to be decided," he said. Another person aware of the development said a committee has been formed to prepare for the energy exchange's listing. He too declined to be named.
The exchange is in advanced talks to hire bankers to manage the share sale, according to two bankers. "IEX had been looking to bring an equity partner on board for the last one year. Plans to take the exchange public could be due to the inability of finding a partner who could bring in funds," one of them said. Both the bankers requested anonymity.
Spokespersons at IEX were unavailable for comment. PTC India clarified to BSE that it is unaware of any such development. FTIL has been looking to pare its stake in IEX against the backdrop of Central Electricity Regulatory Commission (CERC), the power sector regulator, asking the firm bring its shareholding down to 25%. In March, FTIL had announced sale of 5% stake in IEX for Rs.72.89 crore as part of efforts to comply with the regulatory norms. Post that transaction, its shareholding in the company would reduce to 28.49%.
In April, FTIL founder Jignesh Shah stepped down from the IEX board. On its plans to exit from IEX, FTIL in a clarification note to the exchanges said, "While the stake sale process in Multi Commodity Exchange Ltd of India is on, for other exchanges, FTIL is evaluating various options to exit, including IPO."
Similarly, as per the CERC's guidelines, PTC India has also been selling its stake to private equity firms. CERC does not allow an electricity trader to hold more than a 5% stake in an electricity exchange. In the past, IEX has sold its stake to PE firms like Multiples Alternate Asset Management, Bessemer Venture Partners and Lightspeed Venture Partners.
Shah stepped down after CERC proposed a new regulation that would have resulted in an effective censure of his appointment on the board of IEX. The regulation stated that if any person is found unfit to head an exchange by any regulatory agency, he or she will not be entitled to hold any position on the board of power exchanges.