Indian Energy Exchange (IEX) is in talks with strategic investors to sell a minority stake in its fledgling gas unit.
The largest electricity trading platform in India may sell as much as 49% in the venture in a series of deals, Rajiv Srivastava, chief executive officer of IEX said in an interview. The first accord may be signed in three months, he said. State-run gas supplier GAIL India Ltd in June said it was considering buying a stake.
The zero-debt company is pinning its hopes on India’s plans to expand the use of natural gas to quell chronic air pollution choking its cities. The government aims to raise the share of gas in its energy mix to 15% over
the next decade from about 6% and is seeking $60 billion of investment in pipelines, city distribution and import terminals.
Natural gas trading opportunities exceed those in power transactions, Srivastava said. “We don’t need money to run the gas exchange, clearly, we need partnerships” to expand the market, he said, explaining the reasons for seeking a stake sale. India needs “a few policy enablers” for the gas market to take off, Srivastava said, and IEX is working with the government on areas including pricing, taxation and transmission to boost the fuel’s appeal, he added.
IEX’s shares have outperformed India’s equity benchmark this year and analysts expect they will continue to do so for the next 12 months, according to Bloomberg data.