Manikaran Power System in race to buy NSE stake in PXIL

MPL leading consortium of six interested parties

Kolkata-headquartered power trading licencee Manikaran Power System Limited (MPL) is likely to take a controlling stake in Power Exchange India Limited (PXIL) from the National Stock Exchange (NSE) as the latter decided to offload the power trading platform ahead of its IPO.

In January 2017, NSE along with the National Commodity and Derivatives Exchange (NCDEX) had proposed to shut down “loss-making PXIL” but later it was put on the block. NSE-NCDEX collectively own 61 per cent in PXIL. 

PXIL’s valuation, according to past submissions, is estimated to be around Rs 2,000 crore.

Sources said MPL is leading a consortium of six companies, which include thermal power companies and institutional investors, wanting to buy a controlling stake in PXIL. MPL, alone, is learnt to be buying 50 per cent stake. 

Executives in the know of the matter said the transaction has concluded but is pending for the mandatory regulatory approval from the Central Electricity Regulatory Commission (CERC).

“Noted groups in the power sector are part of the consortium… the financial agencies are supporting MPL in the transaction,” said an executive declining to disclose the names citing a “non-disclosure agreement”.

MPL promoters refused to comment as the deal is awaiting approval from CERC. MPL was founded in 2008 by Navjeet Singh Kalsi and Jaspreet Singh Kalsi, who hail from Ranchi. The company has its headquarters in Kolkata and offices across Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, Vadodara and Ahmedabad. 

MPL is an inter-state trading licensee and a trading member on Indian Energy Exchange (IEX) and trading-cum-clearing member on Power Exchange India Limited (PXIL). It provides electronic platform for trading of power at IEX and PXIL, documentation and assistance in bilateral trading of power, REC (renewable energy certificate) trading and group captive.

 Its website states that it has close to 1,940 clients in both power trading and RECs. 

Apart from PXIL, IEX is the only other power trading marketplace in the country. PXIL has only two per cent in the power trading market, with average daily traded volume of close to three 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 widened to Rs 2.45 crore in 2015-16, from Rs 1.8 crore a year before.

Other equity holders in PXIL include GMR Energy, Tata Power and JSW Energy, state-owned Power Finance Corporation, Gujarat Urja Vikas Nigam Limited and West Bengal State Electricity Distribution Company.