Indian Energy Exchange Ltd. · NSE:IEX
Indian Energy Exchange — Investor Presentation (September 2022)
44 slides from Indian Energy Exchange's investor presentation, Sep 7, 2022
Slide 1: Exchange filing cover letter
Dated: September 07, 2022 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- 400001 Bandra (E), Mumbai-400 0
Slide 2: Analyst Meet 7th September 2022
Analyst Meet 7th September 2022 1
Slide 3: Disclaimer
Disclaimer This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are predictive in nature, depend upon or refer to future events or conditions, based on current expectations of the management of Indian Energy Exchange Limited or any of
Slide 4: In this presentation
In this presentation: Indian Energy Exchange Business Updates Policy & Regulatory Customer Centricity Exchange Technology Financial Performance Indian Gas Exchange 3
Slide 5: Electricity Value Chain
Electricity Value Chain Generation Transmission Distribution & Consumption Energy Transition World’s largest network Reforms Underway Installed Capacity As on FY 2030 ➢ Inter-reg. trans. Cap.: 113 GW ➢ Avg. AT & C Losses: 21% presently 30th CEA to 15% ➢ 4.60 Lakh CKM of trans. lines Jun22 Proj. ➢ Gr
Slide 6: Electricity Growth Drivers
Electricity Growth Drivers India is placed as the most promising economy on the global map: ➢ Industrialization 2,158 ✓ High GDP growth of about 8% expected to drive electricity 1,876 ✓ Core sector, traction, EV, cooking will drive electricity consumption 1,667 ➢ Rapid urbanization/ Rural Electrific
Slide 7: Short Term Market Comparison
Short Term Market Comparison FY22 ST Market Trend (BU) – 5 Year CAGR % Share in % Share in Transaction Type Volume Total Generation ST Market Short Term Generation (BU) 3.8% 9.5% Bilateral 60 32.1% 4.5% 1492 187 1242 Direct 21 11.0% 1.6% 119 Trader 40 21.1% 3.0% PXs 102 54.3% 7.7% DSM FY 17 FY 22 FY
Slide 8: India's premier technology-led energy marketplace
India’s premier technology-led energy marketplace ➢ Nation wide, automated and transparent trading Robust Ecosystem platform for physical delivery of electricity, renewables & certificates ➢ Commenced operations in 2008; CERC regulated 7000+ 4400+ 1500+ Registered Commercial & RE Generators & ➢ Publ
Slide 9: Product Mix
Product Mix FY22 FY23 till Aug’22 DAM 5% 6% 6% Green 11% 20% 48% RTM 64% 28% TAM 5% 7% Certificates Total Electricity Volume: 102 BUs Total Electricity Volume: 38 BUs Matching Closed, Double- sided Open Auction - Continuous Reverse Auction Auction Uniform Price Step Matching Existing Products DAM, G
Slide 10: IEX Market Share Product Wise
IEX Market Share Product Wise FY-22 Total Vol (BU) IEX MS % FY23 till Aug’22 120 .0 99.9% 100% 101.5 94.2% 120 .0% 100 .0 100 .0% 45 99.1% 100% 42 120 .0% 80. 0 65.2 55.7% 80. 0% 40 82.3% 100 .0% 77.5% 35 44.8% 60. 0 60. 0% 19 30 80. 0% 25 85.6% 60. 0% 40. 0 19.9 40. 0% 20 11 10.0 10 15 40. 0% 20. 0
Slide 11: DAM: Price trends (Rs./kWh)
DAM: Price trends (Rs./kWh) FY-20 : 3.01 | FY-21 : Rs 2.82 l | FY-22 : 4.39 | FY-23: 6.76 10.06 8.01 8.09 6.76 6.49 5.41 5.16 4.4 4.44 5.06 3.08 3.70 3.54 3.16 4.06 3.32 3.40 3.39 3.19 2.83 3.06 2.95 2.91 2.85 2.72 3.33 3.38 3.32 2.92 2.72 2.83 2.85 2.91 2.45 2.42 2.57 2.47 2.43 2.69 2.70 2.35 APR M
Slide 12: DAM: Volume & Price Trends
DAM: Volume & Price Trends Avg. Sell Bid(MUs) Avg. Purchase Bid (MUs) Avg. Cleared Vol. (MUs) Avg. MCP (Rs./kWh) 450 14. 00 12.32 400 10.68 12. 00 350 10.06 10. 00 300 250 6.76 6.49 8.0 0 200 5.06 5.41 5.16 4.40 4.47 6.0 0 3.70 3.39 5.61 3.06 3.08 150 2.83 2.94 4.0 0 100 4.44 3.54 137 282 186 114 28
Slide 13: Supply Side Constraints leading to high price discoveries
Supply Side Constraints leading to high price discoveries Geo-Political factors have impacted international coal and electricity prices worldwide HBA Index ($/T) 40 E Auction Coal Qty (MT) 36 0% E -auction Prices above 35 -10% -20% notified Price (%) 30 -33% -30% -41% 25 425% -40% 20 15 12 -50% 345%
Slide 14: DAM Market Snapshot
DAM Market Snapshot 28th Jul’21: RS.3.2/kWh 28th Jul’22: Rs.6.4/kWh 18000 12.0 18000 12.0 16000 16000 10.0 10.0 14000 14000 12000 8.0 12000 8.0 10000 10000 6.0 6.0 8000 8000 6000 4.0 6000 4.0 4000 4000 2.0 2.0 2000 2000 0 0.0 0 0.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 3
Slide 15: Coal supply & Inventory
Coal supply & Inventory ➢ Coal production increased by 26.5% YoY and dispatch to power sector Coal Inventory at Power Plants increased by 21.3% in first 4 months of this fiscal whereas coal generation 30 12 10 11 11 has increased at a lower rate of 16% 25 10 20 9 9 8 ➢ Captive mines production incre
Slide 16: Price - Volume Outlook
Price - Volume Outlook ➢ Easing supply constraints ✓ Improvement in coal production and higher inventory will result in increase in sell by both Discoms & IPPs ✓ IPPs sell will provide Round the Clock supply resulting in better availability & lower prices in peak hours ✓ Lower prices will lead to in
Slide 17: Policy Advocacy to Enhance Liquidity in the Spot Market
Policy Advocacy to Enhance Liquidity in the Spot Market ➢ Pool based CfD mechanism for RE capacity addition through the market ➢ Merchant RE capacity addition – 25% merchant capacity in all PPAs ➢ Unallocated power of the Central Generating Stations should be sold through exchange ➢ No renewal of ex
Slide 18: In this presentation
In this presentation: Indian Energy Exchange Business Updates Policy & Regulatory Customer Centricity Exchange Technology Financial Performance Indian Gas Exchange 17
Slide 19: Policy and Regulatory Environment
Policy and Regulatory Environment ➢ Draft National Electricity Policy 2021 has targeted to deepen the spot market - introduce suitable market mechanism including capacity market to do away with the present rigidity of long term PPAs ➢ Draft Electricity Act Amendment Bill 2022 has proposed to introdu
Slide 20: Major Positive Regulatory Updates w.r.t Power Markets
Major Positive Regulatory Updates w.r.t Power Markets ➢ Late Payment Surcharge and Related Matters Rules 2022, Gencos are free to sell un-requisitioned power through Power Exchanges without obtaining any consent. Timely payments across all segments. ➢ GNA Regulations will streamline network access &
Slide 21: New Business Initiatives
New Business Initiatives Renewable through Markets – Merchant RE ➢ IEX has been working with SECI & Deloitte to conduct feasibility study of Market based models for RE capacity addition ➢ The study results shows that market based RE models can command an IRR of 18%-20% V/s SECI bid projects having I
Slide 22: Future Opportunities
Future Opportunities Virtual PPA’s ➢ VPPA is a financial instrument used by buyers and sellers to hedge cost of electricity ➢ The buyer is not obligated to undertake direct physical delivery of electricity from the seller ➢ The seller sells the power generated at Exchange & undertakes realization fr
Slide 23: Way Forward (1/2)
Way Forward (1/2) Growth from ➢ RTM: June’20 recently ➢ Green Markets: GTAM launched in Aug’20, GDAM launched in Oct’21 launched ➢ Cross Border: April’21 products ➢ Long Duration Contracts: June’22 ➢ Ancillary Market, Gross Bidding Contract ➢ Launch of Derivatives will provide price hedging opportun
Slide 24: Way Forward (2/2)
Way Forward (2/2) Favorable ➢ Spot markets share to increase significantly as per Draft NEP 2021 Policy and Regulatory ➢ GNA Regulation, Sharing Regulations, Grid Code, Late Payment Surcharge Rules, and sale of un- Initiatives requisitioned power on exchanges will help deepen the power markets ➢ Gov
Slide 25: In this presentation
In this presentation: Indian Energy Exchange Business Updates Policy & Regulatory Customer Centricity Exchange Technology Financial Performance Indian Gas Exchange 24
Slide 26: Creating a customer centric energy marketplace
Creating a customer centric energy marketplace through efficient and state of the art technology solutions 25
Slide 27: Create Customer Delight for each Interaction
Create Customer Delight for each Interaction ➢ Ease of Bidding ➢ Digital Registration Bidding ➢ Multiple Products ➢ Frictionless ➢ Efficient Price Discovery ➢ Quick Customer ➢ Data Insights Interactions ➢ Automated ➢ On-Time Payment ➢ Real-Time Communication ➢ Robust Risk Management Financial Schedu
Slide 28: New Products / Contracts
New Products / Contracts 1st June - Real Time Market 2020 21st August - Green Term Ahead Market 17th April - Cross Border Exchange Transactions in DAM 2021 26th October - Green Day Ahead Market 27th June - Any-day(s) Single Side Reverse Auction 27th June 2022 - Weekly contract for 2nd Week Delivery
Slide 29: Customer Centricity
Customer Centricity Ease of Bidding ➢ Automated Bidding through Application Programming Interface (API) ➢ Bid Creation Tool for creating Bulk upload bids ➢ Integration with the National Open Access Registry (NOAR) of POSOCO ➢ Auto carry forward of un-cleared bids ➢ Seamless DC – DR transition to ens
Slide 30: In this presentation
In this presentation: Indian Energy Exchange Business Updates Policy & Regulatory Customer Centricity Exchange Technology Financial Performance Indian Gas Exchange 29
Slide 31: Customer Centric Technology and Product Strategy
Customer Centric Technology and Product Strategy CUSTOMER CENTRIC EFFICIENT STATE OF THE ART ➢ Digital Experience ➢ Comprehensive Product Portfolio ➢ National Open Access Registry ✓ Secure Web Access ✓ Longer Duration Contract ✓ Integration of NOAR ✓ Integrated bids across segments ✓ Green Day Ahead
Slide 32: Transitioning Towards a Futuristic Tech Architecture
Transitioning Towards a Futuristic Tech Architecture Automated ➢ Digital Inside Manual Workflow ➢ Open API Integration Digital Mesh ➢ Automation Modular ➢ Service Oriented Architecture Monolithic ➢ Automated Bank Integration Digital Twins ➢ Web-based Portal Desktop-based All Platforms ➢ Power Market
Slide 33: In this presentation
In this presentation: Indian Energy Exchange Business Updates Policy & Regulatory Customer Centricity Exchange Technology Financial Performance Indian Gas Exchange 32
Slide 34: Robust Performance
Robust Performance Volume (BU) Revenue (INR Cr) 102 478 6 52 75 256 294 297 357 57 61 60 1 40 9 6 26 40 40 102 113 11 96 21 23 426 74 317 46 52 54 0 1 230 254 257 12 15 21 22 90 98 FY18 FY19 FY20 FY21 FY22 Q1FY22 Q1FY23 FY18 FY19 FY20 FY21 FY22 Q1FY22 Q1FY23 Electricity Certificates Revenue from Ope
Slide 35: Expenses Performance
Expenses Performance Operating Expenses (INR Cr) Operating Expenses % of Total Income 53 55 48 49 42 14 18 16 18 23 13 17% 16% 16% 15% 33 39 37 12% 11% 24 25 5 8 FY18 FY19 FY20 FY21 FY22 Q1FY23 FY18 FY19 FY20 FY21 FY22 Q1FY23 Manpower Cost Other Operating Expenses Technology in Focus ➢ Technology fo
Slide 36: Wealth for Shareholders
Wealth for Shareholders Net Worth (INR Cr) Continuous payout to shareholders Buy Back of Dividend Total Cash % of PAT S.No F.Y. PAT Shares Per Share Pay-out Distributed 1 2021-22 303 - 2 180 59% 2 2020-21 213 - 4 119 56% 702 771 531 3 2019-20 178 - 2 90 51% 370 390 284 4 2018-19 165 69 - 69 42% FY18
Slide 37: Shareholding Highlights
Shareholding Highlights Shareholding Structure as on June 30, 2022 Major Shareholders Holding > 1% S.No. Name of Shareholders % of Equity OTHERS QUALIFIED 1 MIRAE ASSET TAX SAVER FUND 7.04 4% INSTITUTIONAL 2 DPVL VENTURES LLP 6.96 BUYER 5% INDIVIDUALS 3 PARAG PARIKH FLEXI CAP FUND 5.02 37% 4 DALMIA
Slide 38: In this presentation
In this presentation: Indian Energy Exchange Business Updates Policy & Regulatory Customer Centricity Exchange Technology Financial Performance Indian Gas Exchange 37
Slide 39: Market Models
Market Models 6 Regional Gas Hubs with multiple Delivery Points and 6 new Delivery Points for Domestic Gas Total 6 contracts being traded on the exchange Price discovery through open auction and continuous matching mechanism INR Contracts Minimum lot size 50 MMBtu /day or 1250 SCMD 38
Slide 40: Market Participants
Market Participants Proprietary Member Clients *Selected representation IGX has 31 registered members and 75+ active clients 39
Slide 41: Business Updates
Business Updates ➢ Total Volume Traded Since Inception – 209.8 Lakh MMBtu ➢ Achieved Break-even in first year of operations ➢ Total Registered Members & Clients: 31 Members & 75+ Traded volume (Lakh MMBtu) Active Clients ➢ FY22 Performance 71 ✓ Total volume traded: 121.4 Lakh MMBtu 41 45 ✓ Highest v
Slide 42: Key Gas Market Enablers
Key Gas Market Enablers Inclusion of Natural Gas under GST Implementation of Unified Tariff Regulations by PNGRB Implementation of new Access Code Regulations Declaration of CGD Exclusivity (Open Access within CGD Areas) Incorporation of TSO 41
Slide 43: Way Forward
Way Forward ➢ Government’s vision of increasing share of Natural Gas in total energy basket from ~6.3% to 15% by 2030 will increase gas consumption in the economy from current 160 MMSCMD to 500+ MMSCMD ✓ With completion of 11th CGD bidding round >90% population will be covered in next 6 years ✓ LNG
Slide 44: Thank you
Thank you @IndianEnergy @indian-energy @IEX_India_ ExchangeLtdIEX -exchange-limited Phone: +91-120 4648100 Email: contact@iexindia.com Website: www.iexindia.com 43
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