Mumbai: TVS Shriram Growth Fund, the investment arm of TVS Capital Funds Ltd, has acquired a stake of about 4% in Indian Energy Exchange Ltd (IEX) from Bessemer Venture Partners for Rs.81 crore, the firm said on Tuesday.
IEX, founded in 2007, operates the country’s first automated and online power exchange and offers products that permit trading in electricity (for physical delivery) and renewable energy certificates (RECs).
The IEX is the largest energy exchange in the world, in terms of the number of registered participants currently at 3,000-plus.
It is regulated by the Central Electricity Regulatory Commission (CERC) and is promoted by Financial Technologies (India) Ltd (FTIL) and PTC India Financial Services Ltd.
In 2015 fiscal, the total volume traded in the day-ahead market on the exchange was 28 billion units, said TVS Capital in a statement.
“The power sector in India is undergoing a transformation and power trading is poised to take off from current levels of 3.2% to 9-10% over next 5-6 years driven by additions to power generation capacity, improvements in transmission infrastructure and national, regional and state-level decongestion plan. IEX with customized technology to address the power situation/regulations around it and capable management at the top is well positioned to benefit from the overall positive sector macro especially in the long-term horizon,” said Gopal Srinivasan, chairman and managing director, TVS Capital Funds.
In June, FTIL had entered into a new share-purchase agreement with a clutch of entities, including DCB Power Ventures Ltd and Aditya Birla Private Equity, to sell a 16.6% stake in IEX for Rs.357 crore.
FTIL holds about 26% stake in the energy exchange.
In 2013, regulator CERC asked FTIL to sell its stake and exit IEX after a Rs.5,600-crore fraud surfaced at National Spot Exchange Ltd (NSEL).
FTIL holds 99.99% of NSEL.
TVS Shriram Growth Fund has over Rs.1,100 crore of assets under management.
In September, TVS Capital Funds invested Rs.85 crore in listed entity Prabhat Dairy Ltd for a 7.57% stake. It also has investments in Nykaa.com, RBL Bank Ltd, Wonderla Amusement Park & Resort and Karur Vysya Bank.