State-run power giant NTPC is mulling acquiring a 5 percent stake in Power Exchange of India Limited (PXIL), which provides various electricity trading options, a senior official said.

PXIL is India's first institutionally promoted power exchange, which has been providing various electricity trading solutions and connecting buyers and sellers since 2008.

A senior official told PTI that NTPC plans to "buy up to five percent equity stake in PXIL. This decision was made in light of the government's intention to increase the stock market to 25 percent of total electricity supply in India by 2023-24".

When asked if an acquisition of more than 5 percent in PXIL is in the cards, the official explained that NTPC can only buy 5 percent of the shares of PXIL because it can also be a seller or buyer on the trading platform.

According to the data available on the portal of the Ministry of Corporate Affairs, the authorized share capital of PXIL, which was incorporated on February 20, 2008, is Rs 120 crore and its paid-up capital is Rs 58.47 crore.

The government intends to expand the spot energy market share of the country's total electricity supply to 25 percent by 2023-24. This is likely to be part of a draft National Electricity Policy (NEP).

The think tank made up of the Department of Energy recommended expanding short-term energy trading volume from around 5 percent today to 25 percent by 2023-24. The Department of Energy is reportedly considering the expert panel recommendation submitted in October 2021.

According to the Central Electricity Regulatory Commission (CERC), the short-term market share accounted for 10 percent of the total electricity purchased in 2019-20. The remaining 90 percent of the total power supply was procured primarily through harassment through long-term contracts and short-term intrastate transactions.

According to industry data, short-term trading accounts for around 14-15 percent of India's total energy supply, most of which are bilateral PPAs (Power Purchase Agreements), while stock trading it is 5 percent. The government intends to increase this 5% to 25% by 2023-24.

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