Indian Energy Exchange Ltd. · NSE:IEX

Indian Energy Exchange — Investor Presentation (January 2019)

44 slides from Indian Energy Exchange's investor presentation, Jan 11, 2019

  1. Slide 1: Investors Presentation December 2018 cover letter to exchanges

    Dated: January 11, 2019 L.)I EX INDIAN ENERGY EXCHANGE The Manager The Manager BSE Limited National Stock Exchange of India Ltd Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Plot no C/1 Dalal Street G Block, Bandra Kurla Complex Mumbai- 400

  2. Slide 2: Investor Presentation December 2018

    Investor Presentation DECEMBER 2018 For Public Use

  3. Slide 3: IEX: India's leading Power Exchange

    IEX: India’s leading Power Exchange 2 28.58 BUs of electricity traded in H-1,FY19 with an increase of 19% Y-o-Y Rs. 84.56 Crs PAT in H-1,FY19 with an increase of 32% Y-o-Y India’s First & Largest Power Exchange Dominant market share of over 98 of traded volume in electricity Diverse registered parti

  4. Slide 4: Exchange: A Competitive 'Market'

    Exchange: A Competitive ‘Market’ 3  Exchanges provide a transparent, competitive and efficient platform for transactions in any market – Stock or commodity. Same is true for power sector.  The concept of Exchanges in Power Sector was initially introduced in 1990-91 in Europe.  Now, worldwide Powe

  5. Slide 5: IEX Evolution

    IEX Evolution 4  Inception in June 2008  Operating under the Regulatory oversight of Central Electricity Regulatory Commission (CERC)  Transparent online market platform for delivery based trading  Flexible trading with price discovery for 96 time-blocks of 15 min each for Day-Ahead Market  Tec

  6. Slide 6: Company Snapshot

    Company Snapshot 5 Market Share: 98% Average daily trade: 6000+ MW High Participation: 6300+ 4000+ Industries I 55 Discoms (all) I 100+ ESCert Entities 480+ Generators I 1600+ RE Generators & Obligated entities Transparency Liquidity Competition Market Share-H1 FY 19 (DAM & TAM) Average Daily Tra

  7. Slide 7: IEX Market Segments

    IEX Market Segments 6 Day-Ahead • Delivery for next day Market • Price discovery: Closed , Double-sided Auction since June,08 Intraday Market & Day- • Intraday: For Delivery within the same day Ahead Contingency • Day Ahead Contingency: Another window for next day Round the clock since Jul’15 • Gate

  8. Slide 8: IEX Volume Growth: Strong trend line

    IEX Volume Growth : Strong trend line 7 Electricity Cleared Volume (MUs) 46,214 40,528 34,397 29,270 28,363 22,811 14,415 12,712 6,214 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 Source: IEX Data (DAM+TAM)

  9. Slide 9: Sector Overview & Impact on Power Exchange

    8 SECTOR OVERVIEW & IMPACT ON POWER EXCHANGE Generation Transmission Distribution

  10. Slide 10: Installed Generation Capacity of India

    Installed Generation Capacity of India (All figures in GW) 9 Generation 344 346 327 298 69 72 57 268 39 243 32 44 45 45 223 29 43 7 7 7 200 28 41 6 26 26 26 41 6 26 24 39 5 24 39 5 23 132 21 8 5 20 35 185 192 197 196 4 165 15 145 130 112 71 10th Plan 11th Plan FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 H1

  11. Slide 11: Installed Capacity & Generation - FY 18

    Installed Capacity & Generation - FY 18 10 Generation Installed Generation Feasible Possible Category PLF(%) Capacity (MW) (BUs) FY-18 PLF(%) Generation (BUs) Coal 197172 60 986 80 1382 Gas 24897 23 50 20 44 Diesel 838 3 0.24 0 0 Hydro 45293 32 126 33 131 Nuclear 6,780 64.5 38 80 48 RE 69022 17 102

  12. Slide 12: Lowered Congestion and Price convergence in Regions

    Lowered Congestion and Price convergence in Regions 11 Average Market Clearing Price (Rs./ Unit) South (S1) 6.86 North (N2) RoI 5.13 4.73 5.11 4.37 3.95 4.08 3.79 3.49 3.27 3.13 3.23 3.31 2.55 2.77 2.79 3.25 3.97 2.58 3.48 3.27 3.07 3.07 3.23 2.52 2.46 2.29 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17

  13. Slide 13: New Schemes by the GoI

    New Schemes by the GoI 12 Distribution  Government of India initiatives like ‘Saubhagya’, ‘24*7 Power Supply’ and ‘Rural Electrification’ has boosted power demand in the Country  Another major initiative UDAY is helping DISCOMs to achieve financial stability and increase power purchase capability

  14. Slide 14: Per capita consumption very low compared to world average

    Per capita consumption very low compared to world average 13 Distribution 13,246 Per Capita consumption 7,289 7,081 kWh 6,486 3,044 3,298 2,438 1149 US France Germany Russia Global China Brazil India Average • With expected thrust on economic and industrial development and 24/7 power supply, Per Cap

  15. Slide 15: Power Exchange across Globe: Enormous potential to grow

    Power Exchange across Globe: 14 Enormous potential to grow for India compared to international benchmarks INDIA TRADES ~3 OF ITS OVERALL CONSUMPTION ON EXCHANGE MARKETS COMPARED TO 15-91 GLOBALLY GLOBAL BENCHMARKS ON PENETRATION OF ST MARKETS VOLUME IN BU (Billion Units) Indian markets still at a na

  16. Slide 16: Market Snapshot

    15 MARKET SNAPSHOT

  17. Slide 17: India Power Sector Key Market Segments

    India Power Sector I Key Market Segments* 16 Long Term Short Term 1,202,971 MU OTC: Exchanges: Up to 25 years Real Time Intraday to 1 year Intraday – 11 days 1,075,354 MU 57,835 MU 45,572 MU 24,209 MU 89.4% 4.8% 3.8% 2.0% Exchanges (Only up to 11 days) Long-term Power Bilateral & Banking  Day Ahead

  18. Slide 18: Short term market snapshot (Billion Units)

    Short term market snapshot (Billion Units) – Financial Year 17 FY 17 FY 18 4% 1157.9 1203.0 7% 3% 14% 119.2 127.6 56.0 57.8 45.6 40.0 4% 23.2 24.2 Direct/Banking & Power Exchanges DSM Short Term Total Generation Trader Overall generation in the country, increased by 5.32 in FY 18 Source: CERC MMC Re

  19. Slide 19: Product Wise IEX's Volume Growth - Q2 FY19 & H1 FY19

    Product Wise IEX’s Volume Growth – Q2 FY19 & H1 FY19 18 Q2_FY 18 Q2_FY 19 H1_FY 18 H1_FY 19 19% 16% 28450 14039 12076 23964 314% 325% 3111 5120 751 1205 DAM & TAM (In MUs) REC (In '000) DAM & TAM (In MUs) REC (In '000)

  20. Slide 20: Price Trend: Avg. MCP

    Price Trend : Avg. MCP (Rs./unit) 19 FY16 :2.73 FY17 : 2.42 FY18 : 3.26 H-1 FY19 : 3.81 4.69 4.67 4.09 4.02 4.08 3.98 3.73 3.46 3.34 3.55 3.68 3.20 3.23 2.92 3.13 3.00 2.91 2.74 3.03 2.61 2.77 2.62 2.59 2.56 2.54 2.82 2.50 2.68 2.31 2.49 2.32 2.56 2.43 2.46 2.52 2.32 2.56 2.67 2.32 2.30 2.16 2.17 Ap

  21. Slide 21: Strong and Growing Base of Participants

    Strong and Growing Base of Participants 20 Price Sensitive Open Access Volumes Registered participants has been growing 8,000 Drawal (MUs) Registered Participants 7,000 7000 6,000 6000 5,000 5000 4,000 4000 3,000 3000 2000 2,000 1000 1,000 0 Dec-11 Jun-08 Jan-09 Aug-09 Feb-13 Sep-13 Jun-15 Jul-12 Ja

  22. Slide 22: Opportunities & Challenges for Exchange Operations

    21 OPPORTUNITIES & CHALLENGES FOR EXCHANGE OPERATIONS

  23. Slide 23: Key Growth Drivers: Efficient Price Discovery

    IEX | Key Growth Drivers for the Power Exchange Market 22 Efficient price discovery has been the biggest growth driver for exchanges in the past Efficient Price ♦ Discoms can source cheaper power through Exchange to meet shortages discovery ♦ Industries can source competitive power to reduce their i

  24. Slide 24: Key Growth Drivers: Flexibility

    IEX | Key Growth Drivers for the Power Exchange Market 23 Exchange provides flexibility to purchase power as per requirement throughout the Flexibility year Option available to Buy/Sell different quantum for each 15 mins time block. Minimum bid quantum can be as low as 0.1 MW Gujarat Buy Volume for

  25. Slide 25: Gujarat Buy Volume on 1st May 2018

    IEX | Key Growth Drivers for the Power Exchange Market 24 Gujarat Buy Volume on 1st May, 2018 2000 1600 1200 MW 800 400 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

  26. Slide 26: Uttar Pradesh Buy Volume 3rd June 2018

    IEX | Key Growth Drivers for the Power Exchange Market 25 Uttar Pradesh Buy Volume 3rd June,2018 800 700 600 500 Bid Quantity (MW) 400 300 200 100 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 Time Block

  27. Slide 27: Telangana Sell Volume on 5th May 2018

    IEX | Key Growth Drivers for the Power Exchange Market 26 Telangana Sell Volume on 5th May,18 2500 2000 1500 Bid Quantity (MW) 1000 500 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 Time Block

  28. Slide 28: Sembcorp IPP Sell Volume on 9th Oct 2017

    IEX | Key Growth Drivers for the Power Exchange Market 27 Sembcorp IPP Sell Volume on 9th Oct,17 760 740 720 700 680 Bid Quantity (MW) 660 640 620 600 580 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 Time Block

  29. Slide 29: Key Growth Drivers for the Power Exchange Market

    IEX | Key Growth Drivers for the Power Exchange Market 28 ♦ Guidelines of Ministry of Power and CERC draft regulations allow for grid Cross Border Trade connected neighboring countries like Bhutan, Nepal and Bangladesh to trade power through the Term Ahead Market of the Exchanges ♦ With transmission

  30. Slide 30: Key Growth Drivers: DSM linking, Real Time Market, Futures

    IEX | Key Growth Drivers for the Power Exchange Market 29 Linking DSM  CERC has proposed Draft 4th amendment to DSM Regulations on with Exchange 29.06.2018. Price  It proposes linking of DSM Price Vector to the Exchange’s daily average Area Clearing Price  CERC has issued a Discussion Paper on Re

  31. Slide 31: Other Growth Drivers: Gas Exchange

    IEX | Other Growth Drivers for the Power Exchange Market 30 GAS Exchange • MoPNG Minister Mr Dharmendra Pradhan announced intent of the govt. to have a gas trading platform this year. • OIDB (Oil India Development Board) awarded KPMG the consultancy assignment to develop a framework for gas trading

  32. Slide 32: Challenges to growth of Exchanges

    Challenges to growth of Exchanges 31  States blocking Open Access  Increasing CSS by some States  Additional surcharge introduced in few states such as Rajasthan, HP, Punjab and DNH reducing viability for OA consumers, Non-issuance of NoC With separation of content and carriage as expected in EA

  33. Slide 33: Short Term Market Volumes on a rise

    Short Term Market Volumes on a rise 32 CRISIL Short-term power market forecast (in billion units / percentage) 21.1% 300 17.5% 15.0% 237.5 13.1% 194.3 11.8% 10.3% 163.4 142.6 119.2 126.4 97.7 76.2 60.9 40.5 48.9 FY17 FY18E FY19E FY20E FY21E FY22E Short term Volume Potential (BU) IEX Volume (BU) Shor

  34. Slide 34: Financials

    33 FINANCIALS

  35. Slide 35: Stellar Financial Performance: IEX

    Stellar Financial Performance: IEX 34 Value in INR Crores Particular FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 Revenue 71 138 174 177 200 233 256 Operating 19 33 38.5 41 50 55 46 Expenditure Operating Profit 52 105 135.5 136 150 178 210 (EBITDA) EBITDA 73 76 78 77 75 76 82 PBT 48 93 133 133 147 174

  36. Slide 36: Financial Highlights - Quarter II

    Financial Highlights – Quarter II 35 (Rs. In Lacs) Particulars Q2FY18 Q2FY19 Y-o-Y(%) Total Revenue 6,109 7,522 23 Operating Expenses 927 1,218 31 EBITDA 5,182 6,304 22 EBITDA Margin (%) 85 84 PBT 4,887 6,034 23 Tax 1,621 1,767 9 PAT 3,266 4,267 31 Cash Profit 3,556 4,531 27 EPS* (Not Annualized) -

  37. Slide 37: Detailed Financials - Quarter II

    Detailed Financials - Quarter II 36 Rs. in lacs Quarter Ended 30th September Particulars Q2FY18 Q2FY19 Y-o-Y(%) Revenue Transaction Fees 4,976 6,202 25 Admission Fees & Annual Fees 606 484 (20) Other Income 527 836 59 Total revenue 6,109 7,522 23 Expenses Employee benefits 583 593 2 Other expenses 3

  38. Slide 38: Financial Highlights - H1, FY19

    Financial Highlights -H1, FY19 37 (Rs. In Lacs) Particulars H1_FY18 H1_FY19 Y-o-Y (%) Total Revenue 12,300 14,940 21 Operating Expenses 2,171 2,466 14 EBITDA 10,129 12,474 23 EBITDA Margin (%) 82 83 PBT 9,681 11,940 23 Tax 3,277 3,484 6 PAT 6,404 8,456 32 Cash Profit 6,841 8,978 31 EPS* (Not Annuali

  39. Slide 39: Detailed Financial - H1, FY19

    Detailed Financial - H1, FY 19 38 Rs. in lacs Half year Ended 30th September Particulars 2018 2019 Y-o-Y (%) Revenue Transaction Fees 9,810 12,346 26 Admission Fees & Annual Fees 1,242 1,037 (17) Other Income 1,248 1,557 25 Total revenue 12,300 14,940 21 Expenses Employee benefits 1,046 1,204 15 Oth

  40. Slide 40: Revenue Breakup Analysis: Improved Transaction income

    Revenue Breakup Analysis 39 H-1 FY19 10% 10% 7% 10% H1FY18 H1FY19 Improved Transaction income 80% 83% Transaction Fees Admission & Annual Fees Other Income Transaction Fees Admission & Annual Fees Other Income Quarterly 9% 11% 10% 6% Q2FY18 Q2FY19 81% 83% Transaction Fees Admission & Annual Fees Oth

  41. Slide 41: Top 10 shareholders of IEX

    Top 10 shareholders of IEX (As on 30th Nov ,2018) 40 of Total Equity S. No. Name of Shareholder Share Capital 1 TVS SHRIRAM GROWTH FUND 15.00 2 DCB POWER VENTURES LIMITED 10.00 3 AGRI POWER 4.99 4 WESTBRIDGE CROSSOVER FUND, LLC 4.75 5 SMALLCAP WORLD FUND, INC 4.53 6 RIMCO (MAURITIUS) LIMITED 4.50 7

  42. Slide 42: Awards & Accolades

    41 AWARDS & ACCOLADES

  43. Slide 43: Awards & Accolades

    Awards & Accolades 42  “Investor Relations Award 2018 - Best IPO in Mid Cap Segment” IR Society of India  “Best CFO Award in 100-500 turnover category”- 2018 The Financial Express  “Leaders in Power Market Development”- 2014 I 2015 Council of Power Utilities  “Exchange of the Year”- 2014 Power B

  44. Slide 44: Thank You

    43 THANK YOU

Indian Energy Exchange — Investor Presentation (January 2019) on 6ix