TVS Growth Fund buys 4 % stake in IEX

The stake was held by Bessemer Venture

TVS Shriram Growth Fund is acquiring four per cent equity stake in Indian Energy Exchange (IEX) from Bessemer Venture Partners for Rs 81 crore. The fund participated in the consortium of this investment led by DCB Power Ventures of Dalmia Bharat Group. The consortium has acquired 20 per cent stake for Rs 430 crore in IEX, which has been valued at 20 times of its earning.

Gopal Srinivasan, Chairman and Managing Director, TVS Capital Funds Ltd said “we have participated in the consortium of this investment led by DCB Power Ventures of Dalmia Bharat Group. Puneet Dalmia who is a Director of TVS Capital Funds Ltd., will also become the Director of IEX”.

The consortium has invested Rs 430 core for the 20 per cent stake in IEX. The fund has bought the stake from Bessemer Venture Partners for Rs 81 crore.

Srinivasan said that he is bullish about power trading as Government is driving and want to give power supply round the clock, which means more generation and transmission and the power sector in India is also undergoing a transformation and power trading is poised to take-off from current levels of 3.2 per cent to 9-10 per cent over next 5-6 years driven by additions to power generation capacity, improvements in transmission infrastructure and national, regional and state-level decongestion plan.

IEX with customised technology to address the power situation/ regulations around it and capable management at the top is well positioned to benefit from the overall positive sector macro especially in the long-term horison.”

Bharat Banka, an Angel Investor and a former MD of Aditya Birla Private Equity was the sole advisor to TVS Capital Funds in this transaction.

Srinivasan, said he looks forward to working closely with DCB Power Ventures of Dalmia Bharat Group who is also a significant investor in IEX. Puneet Dalmia who is a Director of TVS Capital Funds Ltd., has also joined the Board of IEX.

On challenges for IEX, he said, continue innovation is critical, regular regulatory interventions and the amendment of CERC Act, which is in Parliament is an important step. Overall the company is moving in a right direction, said Srinivasan, said that going forward the company would look at IPO.

IEX is the largest energy exchange in the world in terms of number of registered participants, which currently stands at 3,000 plus.

It is co-promoted by Power Trading Corporation of India which has been an anchor in the development of Indian Power Industry. IEX has 95 per cent market share. In fiscal 2015, the total volume traded in Day-Ahead Market on the exchange was 28 billion units. IEX is expected to register a very good growth during the current financial year.