- 19 Aug 2022
- ICICIdirect Research
DEFAULTING STATES GET BARRED FROM POWER EXCHANGE
IEX - 168 Change: 0.94 (0.56 %)News: In a huge blow to IEX13 states, including Andhra Pradesh, Madhya Pradesh, Rajasthan, Tamil Nadu and Telangana, they have been barred from buying and selling on power exchanges till they clear dues to power plants. This is the first time power distribution companies, in such large numbers, have been barred from trading on the exchanges at one go. The buying and selling transactions in all products of the power market for discoms has been entirely restricted till further notice from the delivery date of August 19, 2022.
View: This comes as a huge negative for IEX that has lately been struggling to garner volumes due to price capping and launch of new power exchange. The impact on volumes is yet to be seen but these states include some of the biggest buyers and sellers on power exchanges. Although this order may bring some discipline into the system on receivables position, it may have short-term consequences. It remains to be seen if this order is reversed and how these states cope with this restriction.
Impact: Negative.