IEX was listed on the NSE and BSE on October 23, 2017. In the last five years, the company has given a massive return of more than 250% to its investors. Will IEX continue to provide such great returns in the future as well? Let’s explore IEX growth potential and IEX share price target from 2025 to 2050 in this article.
About IEX
IEX (Indian Energy Exchange) is a power trading platform in India that launched in 2008. It enables consumers and businesses to buy and sell electricity in a transparent and efficient manner. The company assists in balancing power demand and supply, ensuring that electricity reaches its intended destination at the best possible price. IEX has made important advancements to the improvement of India’s electricity market over the years. It provides various types of energy trading, such as renewable energy and real-time markets, assisting the country’s transition to a better and more efficient power system.
IEX Business Model
- Transaction fees: Charges for trading. IEX (Investors Exchange) generates revenue by charging fees for each trade (buying or selling stocks) that occurs on its platform.
- Market Data Sales: Selling Trade Information IEX sells both real-time and historical stock market data to financial institutions, traders, and investors.
- Listing Fees: Companies that want to list their stocks on IEX must pay a fee for the service.
- Technology Services: Providing Tools for Traders IEX charges fees for its advanced trading tools, research, and software services.
- Routing fees: Sending orders to other markets. When IEX sends stock orders to other exchanges for better prices, it may charge a small fee.
- Incentives from market participants: Payments for order flow Some traders or businesses may pay IEX for increased access to their trading system or specific order-handling advantages.
IEX Fundamental Analysis
| Stock Name | Indian Energy Exchange |
|---|---|
| NSE Symbol | IEX |
| Market Cap | ₹ 14980 Cr. |
| 52W High | ₹ 244 |
| 52W Low | ₹ 132 |
| Stock P/E | 37.7 |
| Book Value | ₹ 11.4 |
| Dividend Yield | 1.50 % |
| ROCE | 50.0 % |
| ROE | 37.7 |
| Face Value | ₹ 1.00 |
| Shareholders | Mar 2023 | Mar 2024 | Dec 2024 |
|---|---|---|---|
| FIIs | 17.88% | 10.89% | 16.24% |
| DIIs | 21.53% | 27.24% | 32.78% |
| Public | 60.32% | 61.57% | 50.72% |
| Others | 0.28% | 0.28% | 0.28% |
| No. of Shareholders | 16,30,991 | 15,98,631 | 14,39,967 |
Key Factors Driving IEX Future Growth
- Rising Electricity Demand: India’s electrical use is steadily increasing, with a 7.5% year-on-year growth rate in 2023-24. This increasing demand gives IEX more opportunities to facilitate energy trading.
- Government Initiatives: The Indian government intends to add 50 GW of renewable energy capacity each year, bringing the total to 500 GW by 2030. This hungry goal is expected to increase trading volumes on exchanges such as IEX.
- Diverse Product Offerings: IEX provides a variety of market segments, such as Day-Ahead Market (DAM), Real-Time Market (RTM), and Green Market, to meet a wide range of trading needs and attract a large number of participants.
- Technological Advancements: IEX’s major funds in IT infrastructure, such as API-based systems and cybersecurity changes, boost operational efficiency and user experience, attracting more participants.
- Policy and Regulatory Support: Helpful policies, such as the General Network Access (GNA) regulation and changes to the Electricity Late Payment Surcharge Rules, are deepening power markets, which benefit platforms like IEX.
- Growth into Gas Trading: IEX’s equity stake in the Indian Gas Exchange (IGX) enables it to enter the natural gas market, increasing its offerings and revenue sources.
- Focus on Renewable Energy: With the introduction of the Green Day-Ahead and Green Term-Ahead markets, IEX is well positioned to support and benefit from India’s transition to renewable energy sources.
- Market Leadership: IEX’s market power, with a share of 83-84% in FY’24, builds up its position as a key player in India’s energy trading landscape.
- Careful Partnerships: Partnerships, such as Total Energy’ 10-year LNG supply agreement with Gujarat State Petroleum Corporation (GSPC), show a growing dependency on energy trading platforms like IEX to handle such transactions.
Pros of IEX
- High Return on Capital Employed (ROCE): IEX has maintained an average ROCE of 55.1% over the last five years, which shows that the IEX is using its capital efficiently to generate profit.
- High Return on Equity (ROE): IEX has maintained an average ROE of 41.5% over the last five years, which shows that the IEX is using shareholders funds efficiently to generate profits.
- Low PE Ratio Compared to Peers: IEX has a PE ratio of 37.7, which is lower than the industry average of 46.1, making it relatively undervalued and potentially a good investment opportunity.
- Debt Free Company: IEX is almost debt free company with a debt to equity ratio of 0.01, which shows its financial stability.
- Increase in Institutional Confidence: DIIs have increased their holding to 32.78% in December 2024 from 31.48% in September 2024 while FIIs have increased their holding to 16.24% in December 2024 from 15.66% in September 2024, indicating a strong institutional confidence in the company’s future growth prospects.
Cons of IEX
- High Price to Book Value: IEX is trading at a Price-to-Book Value (P/B) ratio of 15.4, which indicates that its stock is significantly overvalued compared to its book value. This high valuation may limit future upside potential and pose a risk of correction if market sentiment changes.
| Years | Target Price |
|---|---|
| IEX Share Price Target 2025 | ₹210 to ₹260 |
| IEX Share Price Target 2026 | ₹250 to ₹340 |
| IEX Share Price Target 2027 | ₹300 to ₹440 |
| IEX Share Price Target 2028 | ₹360 to ₹570 |
| IEX Share Price Target 2029 | ₹435 to ₹740 |
| IEX Share Price Target 2030 | ₹520 to ₹970 |
| IEX Share Price Target 2035 | ₹1045 to ₹2900 |
| IEX Share Price Target 2040 | ₹2090 to ₹8700 |
| IEX Share Price Target 2050 | ₹8360 to ₹52200 |
Conclusion
In conclusion, IEX has demonstrated strong growth and profitability over the years, delivering impressive returns to investors. With rising electricity demand, government initiatives supporting renewable energy, technological advancements, and market leadership, IEX is well-positioned for long-term growth. While its high price-to-book value presents some valuation concerns, its debt-free status, strong financial performance, and increasing institutional confidence indicate a promising future. For the latest updates, you can visit IEX official website.
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.