Indian Energy Exchange Ltd. · NSE:IEX

Indian Energy Exchange — Investor Presentation (May 2019)

43 slides from Indian Energy Exchange's investor presentation, May 24, 2019

  1. Slide 1: Filing cover letter to BSE and NSE

    (e.'")INDIAN ENERGY EXCHANGE Dated: May 24, 2019 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 Dalai Street G Block, Bandra Kuria Complex Mumbai- 400001 Ba

  2. Slide 2: Investor Presentation Financial Year 19

    Investor Presentation FINANCIAL YEAR 19 For Public Use

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

    IEX: India’s leading Power Exchange 52 BUs of electricity traded in FY19 with an increase of 13% w.r.t. FY18 165.04 Crs PAT in FY19 with an increase of 25% w.r.t. FY18 Dominant market share of 97.5% of traded volume in electricity Traded volume on a day, crossed 306 million units (highest ever) on 2

  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: 97.5% Average daily trade: 6000+ MW High Participation: 6400+ 4000+ Industries I 56 Discoms (all) I 500+ Generators I 1600+ RE Generators & Obligated entities I 100+ ESCert Entities Transparency Liquidity Competition Market Share- FY 19 (DAM & TAM) Average Daily T

  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) 52,706 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 FY19 Source: IEX (DAM+TAM); DAM Volume taken on delivery basis

  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 (GW)

    Installed Generation Capacity of India (GW) 9 Generation 356 344 327 298 69 78 57 268 39 243 32 44 45 45 223 29 43 7 7 200 41 6 7 28 26 26 26 26 24 41 6 39 5 24 39 5 23 132 21 8 5 20 35 201 185 192 197 4 165 15 145 130 112 71 10th Plan 11th Plan FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Coal Gas & D

  11. Slide 11: Installed Capacity & Generation - FY19

    Installed Capacity & Generation - FY 19 10 Generation Installed Generation Feasible Possible Generation Category PLF(%) Capacity (MW) (BUs) PLF(%) (BUs) Coal 200,705 61 1,022.3 80 1407 Gas 24,937 23 49.8 25 55 Diesel 638 2 0.1 0 0 Hydro 45,399 34 134.9 40 159 Nuclear 6,780 64 37.8 80 48 RE 77,642 19

  12. Slide 12: Adequate Transmission System

    Adequate Transmission System 11 Average Market Clearing Price (Rs./ Unit) South (S1) 6.86 North (N2) RoI 5.13 4.73 5.11 4.37 3.96 3.88 3.79 3.49 3.27 3.13 3.23 3.31 2.55 2.77 2.79 3.25 3.81 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 FY 18 FY 19 Market Curt

  13. Slide 13: Demand will Continue to Increase

    Demand will Continue to Increase 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 c

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

    Per capita electricity consumption very low compared to world average 13 Distribution 12994 Per Capita Electricity consumption 6940 7035 kWh 6603 3127 3927 2601 1149* US France Germany Russia Global China Brazil India Average • With expected thrust on economic and industrial development and 24/7 pow

  15. Slide 15: Power Exchange across Globe

    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 nas

  16. Slide 16: Market Snapshot

    15 MARKET SNAPSHOT

  17. Slide 17: India Power Sector: Key Market Segments

    India Power Sector I Key Market Segments (Ason 28 Feb2019) Th 16 Long Term Short Term 1245317 MUs OTC: Exchanges: Up to 25 years Real Time Intraday to 1 year Intraday – 11 days 11001119 69918 MU 50148 MU 25132 MU 88.3% 5.6% 4.1% 2.0% Exchanges (Only up to 11 days) Long-term Power Bilateral & Banking

  18. Slide 18: Short term market snapshot (BUs)

    Short term market snapshot (BUs) 17 FY 10 FY 19 5.5% 9.2% 8.7% 70 24.3% 50 0.3% 33 26 25 7 Total STM Direct/Banking & Trader Power Exchanges DSM Generation Overall generation in the country, increased by 5.6% CAGR. *Source: CERC MMC Report % change is CAGR

  19. Slide 19: Product Wise IEX's Volume Growth

    Product Wise IEX’s Volume Growth _FY 18 FY 18 FY 19 13% 52189 46203 4% 9329 8955 DAM & TAM (MUs) REC* ( '000) Decrease in REC volume due to lower inventory

  20. Slide 20: Price Trend: Avg. MCP (Rs./kWh)

    Price Trend : Avg. MCP (Rs./kWh) 19 FY17: 2.42 FY18: 3.26 FY19: 3.85 5.94 4.67 4.69 3.73 4.09 4.08 4.02 3.98 3.59 3.46 3.34 3.30 3.33 3.23 3.08 3.12 2.77 2.92 3.55 2.59 2.49 3.13 3.00 3.20 2.91 2.43 2.46 2.50 2.54 2.56 2.32 2.31 2.16 2.17 2.32 2.32 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

  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, Punjab Demand

    23 IEX | Key Growth Drivers for the Power Exchange Market Long term PPA for Base load. Flexibility Option available to Buy/Sell different quantum from exchange for seasonal variation Monthly Demand Curve for Punjab (MW) Punjab Base Load 12,377 12,638 12,012 11,405 8,920 7,990 7,083 6,440 6,309 6,564

  25. Slide 25: Key Growth Drivers: Madhya Pradesh Demand

    24 IEX | Key Growth Drivers for the Power Exchange Market Monthly Demand Curve for Madhya Pradesh (MW) Madhya Pradesh Base Load 13,815 13,505 13,215 12,328 11,535 10,016 8,591 8,764 8,775 8,811 8,389 7,711 Demand Base Apr'18 May'18 Jun'18 July'18 Aug'18 Sept'18 Oct'18 Nov'18 Dec'18 Jan'19 Feb'19 Mar

  26. Slide 26: Key Growth Drivers: Gujarat Buy Volume April 2018

    IEX | Key Growth Drivers for the Power Exchange Market 25 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

  27. Slide 27: Key Growth Drivers: Gujarat Buy Volume 1 May 2018

    IEX | Key Growth Drivers for the Power Exchange Market 26 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

  28. Slide 28: Key Growth Drivers: Uttar Pradesh Buy Volume

    IEX | Key Growth Drivers for the Power Exchange Market 27 Uttar Pradesh Buy Volume 3rd June,2018 800 700 600 500 Bid Quantity (MW) 400 300 200 100 0 1 3 5 7 9 11131517192123252729313335373941434547495153555759616365676971737577798183858789919395 Time Block

  29. Slide 29: Key Growth Drivers: Telangana Buy Sell Volume

    IEX | Key Growth Drivers for the Power Exchange Market 28 Telangana Buy Sell Volume on 15th May, 2019 Sell Schedule Buy Schedule 1600 1300 1000 700 Bid Quantity (MW) 400 100 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87

  30. Slide 30: Key Growth Drivers: Transmission, Portfolio Optimization

    IEX | Key Growth Drivers for the Power Exchange Market 29  With transmission capacity augmentation, the loss in volume due to congestion is expected to be further reduced Improvement  Congested volume reduced from 15% in FY 14 to 0.9% in FY 19 in transmission infrastructure  This gives comfort th

  31. Slide 31: Key Growth Drivers: DSM Linking, Real Time Market

    IEX | Key Growth Drivers for the Power Exchange Market 30 Linking DSM  CERC notified amendment to DSM regulation, with effective from 1st Jan with Exchange Price 2019, linking DSM Price Vector to the daily average Area Clearing Price of Exchange at 50 Hz.  CERC has issued a Discussion Paper on “Re

  32. Slide 32: Key Growth Drivers: Futures, Green TAM, Gas Exchange

    IEX | Key Growth Drivers for the Power Exchange Market 31  Participants on Power Exchanges in India currently lack hedging options Forward & in the form of futures & forwards which are common in global markets. Future Contracts  With increased liquidity in the spot market, GoI & regulators have st

  33. Slide 33: Challenges to growth of Exchanges

    Challenges to growth of Exchanges 32  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

  34. Slide 34: Financials

    33 FINANCIALS

  35. Slide 35: Stellar Financial Performance: IEX

    Stellar Financial Performance: IEX 34 (Rs. in Crs) Particular FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY19 Revenue 71 139 174 177 200 233 256 294 Operating 19 33 38 41 50 55 46 51 Expenditure Operating 52 106 136 136 150 178 210 243 Profit (EBITDA) EBITDA 73 76 78 77 75 76 82 83 PBT 48 93 133 133

  36. Slide 36: Financial Highlights Financial Year 19

    Financial Highlights _ Financial Year (As on 31 Mar) st (Rs. in Crs) Particulars FY 18 FY 19 Y-o-Y Total Revenue 256.07 294.16 15% Operating Expenses 45.58 51.26 12% EBITDA 210.49 242.90 15% EBITDA Margin (%) 82% 83% PBT 200.00 231.75 16% Tax 68.31 66.71 (2%) PAT 131.69 165.04 25% Cash Profit 141.96

  37. Slide 37: Detailed Yearly Financial

    Detailed Yearly Financial (As on 31 Mar) st (Rs. in Crs) Particulars FY 18 FY 19 Y-o-Y Revenue Transaction Fees 205.59 234.52 14% Admission & Annual Fees 24.86 19.56 (21%) Other Income 25.62 40.08 56% Total revenue 256.07 294.16 15% Expenses Employee benefits 24.08 24.83 3% Other expenses 18.45 22.9

  38. Slide 38: Revenue Breakup analysis

    Revenue Breakup analysis _ Financial Year FY18 FY19 Transaction Fees Admission & Annual Fees Other Income Transaction Fees Admission & Annual Fees Other Income 10% 13% 10% 7% 80% 80% 37

  39. Slide 39: Top shareholders of IEX (As on 31 Mar 2019)

    Top 10 shareholders of IEX (Ason 31 Mar,2019) st 38 S. % of Total Equity Name of Shareholder No. Share Capital 1 TVS SHRIRAM GROWTH FUND 1B LLP 15.03 2 DALMIA POWER LIMITED 10.02 AGRI POWER AND ENGINEERING SOLUTIONS PRIVATE 3 5.00 LIMITED 4 IIFL SPECIAL OPPORTUNITIES FUND (through various funds) 4.8

  40. Slide 40: Top shareholders of IEX (continued)

    Top 10 shareholders of IEX (Ason 31 Mar,2019) st 39 % of Total Equity S. No. Name of Shareholder Share Capital 15 SBI LIFE INSURANCE CO. LTD 2.24 16 AQUAMARINE MASTER FUND L.P 1.47 17 SBI MAGNUM MULTICAP FUND 1.29 ADITYA BIRLA SUN LIFE TRUSTEE PRIVATE LIMITED A/CADITYA 18 1.28 BIRLA SUN LIFE EQUITY

  41. Slide 41: Awards & Accolades

    40 AWARDS & ACCOLADES

  42. Slide 42: Awards & Accolades

    Awards & Accolades 41  “Best Power Exchange” - 2019 Industrial Energy Management Awards  “Best Power Exchange” - 2018 IPPAI  “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

  43. Slide 43: Thank You

    42 THANK YOU

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