National power bourse gets merger offers from 2 others

The National Power Exchange (NPEX), the country’s third power exchange which is yet to launch its operations, has received separate merger proposals from the other two power exchanges, Indian Energy Exchange (IEX) and Power Exchange India (PXI).

M G Raoot, managing director (MD) and chief executive officer (CEO) of NPEX, said it had informally discussed the merger issue with IEX and PXI, but was yet to take a decision on the issue.

“NPEX is poised to hit the market at an opportune time. The Central Electricity Regulatory Commission (CERC) has recently given its approval for our business rules and by-laws. We are going ahead with our business plan. It’s true that both IEX and PXI have informally discussed with us a proposal for merger. We have not taken any formal view in this regard,” Raoot told Business Standard.

The proposal aims at synergising opportunities in power trading on exchanges. NPEX is promoted by NTPC, NHPC, Power Finance Corporation and Tata Consultancy Services. The other equity partners are BSE, IFCI, Meenakshi Power and DPSC.

“We are confident we will be able to grab the required market share for becoming economically sustainable through our well-conceived business plan,” Raoot added.

IEX MD and CEO Jayant Deo confirmed the merger issue was discussed informally between the two exchanges. “There is a synergy. When IEX came to know that NPEX is thinking of merger, we felt that they should merge with the leader (IEX). The issue is being discussed informally,” he said.

Rupa Devi Singh, MD and CEO of PXI, said the exchange was actively engaging with stakeholders and was confident of its strategy to increase its market share and product offerings. “PXI has been in the forefront of several policy advocacy issues to develop the power market in an orderly manner, such as congestion management and trading of longer tenure products. This will lead to increased market participation and growth of overall market,” she said.

IEX and PXI are currently engaged in energy transactions in the day-ahead and term-ahead markets and issuing renewable energy certificates. The daily turnover at IEX is about 45 million units, while PXI clocks three million units. During 2011-12, IEX’s total transaction was 13.8 billion units, while for PXI it was 1.028 billion units.