Thanks, I read through the thread, have few basic questions and some points, would be good to know other’s thoughts -
- Understand that India’s energy requirements will keep growing, but cost of energy may remain stagnant or even decrease per unit with efficiency and newer sources of energy coming into picture. How does revenue and profits of IEX are aligned. Are they aligned to the per units of energy traded or the “Value” of that energy traded?
- If the above thesis of toll-bridge with pernnial cash flow source is true then this can be a no-brainer and one of the best investment and everyone should invest here in such exchanges. But only some do. Also have not come across any huge wealth creator globally in exchange business. Like say top 10 by market cap in any leading nation. If exchanges (typical toll bridge) businesses are such gems then why they do not become big mammoths?
- BSE was the oldest exchange with first movers advantage. Today its younger brother NSE is the leader. The network effect and first mover advantage of BSE could not save its numero-uno position.
- Strategic investors in Gas exchange is good. But if you closely see energy ecosystem of India in past and present. Many companies in oil & gas had and have cross holdings and invest in stakes for future. It is definitely good for the ecosystem but I would consider it on expected lines.
Disc: Not invested, started to track. Had invested earlier in MCX with typical toll bridge thoughts and have learnt that exchanges/toll-bridges work good in theory but in practice, same river has multiple bridges, new routes come up, new set of entire ecosystems develop…Still interested in this story as a proxy to energy story of India…lets see