shares of Indian Energy Exchange (IEX) 10% rises to upper circuit levels in Friday’s early deals ₹On Thursday, 832 shares were announced on the BSE after the exchange said its board has recommended issuance of bonus shares in the ratio of 2:1, subject to shareholders’ approval.
The Board in its meeting on Thursday recommended bonus issue of equity shares in the ratio of two shares of Re 1 each for every existing Re 1 share held by the shareholders as on the record date. The bonus shares will be issued out of the free reserves created out of the profits of the company available as on March 31, 2021.
“IEX has been an outperformer among power companies, with its share price rising 110 per cent in the last six months, while the power index has gained 15%. This makes the stock extremely attractive from valuation as well as momentum perspective. Sonam Srivastava, Founder, Right Research, said, the bonus issue will also bring liquidity to the stock, which makes it a good bet for investors.
A company issues bonus shares to its shareholders with the aim of increasing the liquidity of the stock as well as reducing the price of its stock to make it affordable to investors. Bonus shares are fully paid-up additional shares issued by a company to its pre-existing shareholder.
“We believe that IEX will continue to dominate the market share as is the case with other exchanges (such as MCX etc.). The valuations certainly look higher even after the recent fall in stock prices following the news of the bonus issue. We IEX may see a phase of consolidation in the near term and hence advise investors to buy on significant downside below 750 price mark,” said Ujjwal Kumar, Research Analyst, Green Portfolio.
Exchange registers nearly 75% increase in its consolidated net profit ₹77 crore for the September quarter, mainly on the back of higher revenue. IEX is the leading electricity exchange in India, which facilitates electricity trading. IEX has about 95% market share in the power exchange market.
Mudit Goel, Senior Research Analyst, SMC Global Securities said, “After the 2:1 bonus adjustment, one should try to buy fresh stake at approx. ₹from 450 ₹470 per share level for the short term target of Rs. ₹600. However, one must maintain a strict stop loss ₹Taking this position in the 400 IEX counter.”
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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