– Policy support to push higher exchange volumes in the future
– Strong growth in volumes led by demand ahead of elections and recovery in manufacturing activities
– A strong moat around the business supported by the highest market share, and entry barrier
– Scalable business with extremely low capital requirements, generating free cash flow, zero debt and good return ratios
In a recent development, CERC issued an order to link DSM (Deviation Settlement Mechanism), which is often below the market price, to exchange price. This is a big positive move for India’s largest power trading exchange Indian Energy Exchange (IEX). The company’s management believes this initiative.