Indian Energy Exchange Ltd. · NSE:IEX

Indian Energy Exchange — Investor Presentation (August 2018)

45 slides from Indian Energy Exchange's investor presentation, Aug 29, 2018

  1. Slide 1: Investor Presentation Intimation Letter to Exchanges

    Dated: August 29, 2018 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- 400001

  2. Slide 2: Investor Presentation August 2018

    Investor Presentation AUGUST 2018 1 For Public Use

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

    IEX: India’s leading Power Exchange 2 14.43 BUs of electricity volume traded in Q-1 FY19 with an increase of 22% over Q-1 FY18 Rs. 41.89 Crs PAT in Q-1 FY19 with an increase of 33% over Q-1 FY 18 India’s First & Largest Power Exchange Dominant market share of over 98% of traded volume in electricity

  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: 5000+ 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-Q-1 FY 19 (DAM & TAM) Average Daily Tr

  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 50,000 Electricity Volume 46,214 45,000 40,528 40,000 Cleared Volume (MU) 34,397 35,000 29,270 30,000 28,363 25,000 22,811 20,000 14,415 15,000 12,712 10,000 6,214 5,000 0 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 71 57 268 39 243 32 44 45 45 223 29 43 7 7 200 41 6 7 28 26 26 26 41 6 26 24 39 5 24 39 5 23 132 21 8 5 20 35 185 192 197 197 4 165 15 145 130 112 71 10th Plan 11th Plan FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 Q1

  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%

  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 3.79 4.08 4.33 3.49 3.27 3.13 3.23 3.31 2.55 2.77 2.79 3.25 4.08 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

  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 R

  19. Slide 19: Product Wise IEX's Volume Growth - Financial Year

    Product Wise IEX’s Volume Growth (Billion Units) – Financial Year 18 26% 56.8 FY 2017 FY 2018 14% 46.2 45.1 40.5 102% 9.3 4.6 1.3 0.0 ESCert* REC Electricity Trade (DAM & Total TAM) *Note – Energy Saving Certificates (Escerts) trading started from September 2017 on IEX Ltd.

  20. Slide 20: Product Wise IEX's Volume Growth - Q1

    Product Wise IEX’s Volume Growth (Billion Units) – Q1 19 Q1_FY 18 Q1_FY 19 22% 14431 11851 343% 2009 453 DAM & TAM (In MUs) REC (In '000) *Note – Trading in Energy Saving Certificates (Escerts) will commence post completion of PAT Cycle 2 in FY 19.

  21. Slide 21: Price Trend (Avg. MCP)

    Price Trend (Avg. MCP) (Rs./unit) 20 FY16 : 2.73 FY17 : 2.42 FY18 : 3.26 Q-1FY19 : 4.13 4.67 4.09 4.08 4.02 3.98 3.73 3.68 3.55 3.20 3.23 2.91 3.13 3.03 3.00 2.92 2.61 2.77 2.56 2.74 2.82 2.62 2.59 2.67 2.52 2.49 2.56 2.50 2.54 2.68 2.43 2.46 2.56 2.32 2.32 2.32 2.30 2.31 2.16 2.17 Apr May Jun Jul A

  22. Slide 22: Strong and Growing Base of Participants

    Strong and Growing Base of Participants 21 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 May-11 Feb-13 Sep-13 May-18 Dec-11 Jun-08 Jan-09 Aug-09 Ju

  23. Slide 23: Opportunities & Challenges for Exchange Operations

    22 OPPORTUNITIES & CHALLENGES FOR EXCHANGE OPERATIONS

  24. Slide 24: Key Growth Drivers: Efficient Price Discovery

    IEX | Key Growth Drivers for the Power Exchange Market 23 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

  25. Slide 25: Key Growth Drivers: Flexibility

    IEX | Key Growth Drivers for the Power Exchange Market 24 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

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

    IEX | Key Growth Drivers for the Power Exchange Market 25 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

  27. Slide 27: Key Growth Drivers: Uttar Pradesh Buy Volume

    IEX | Key Growth Drivers for the Power Exchange Market 26 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

  28. Slide 28: Key Growth Drivers: Telangana Sell Volume

    IEX | Key Growth Drivers for the Power Exchange Market 27 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

  29. Slide 29: Key Growth Drivers: Sembcorp IPP Sell Volume

    IEX | Key Growth Drivers for the Power Exchange Market 28 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

  30. Slide 30: Key Growth Drivers: Cross Border Trade and Transmission

    IEX | Key Growth Drivers for the Power Exchange Market 29 ♦ 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

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

    IEX | Key Growth Drivers for the Power Exchange Market 30 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

  32. Slide 32: Other Growth Drivers: Gas Exchange

    IEX | Other Growth Drivers for the Power Exchange Market 31 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

  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: Short Term Market Volumes on a rise

    Short Term Market Volumes on a rise 33 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

  35. Slide 35: Financials

    34 FINANCIALS

  36. Slide 36: Stellar Financial Performance: IEX

    Stellar Financial Performance: IEX 35 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

  37. Slide 37: Financial Highlights - Financial Year

    Financial Highlights - Financial Year 36 (Rs. In Lacs) Particulars FY17 FY18 YoY Total Revenue 23,288 25,607 10% Operating Expenses 5,519 4,558 (17)% EBITDA 17,769 21,049 18% EBITDA Margin (%) 76% 82% 590 bps PBT 17,385 19,999 15% Tax 6,027 6,831 13% PAT 11,358 13,168 16% Cash Profit 11,700 14,195 2

  38. Slide 38: Detailed Financials - Financial Year

    Detailed Financials - Financial Year 37 Rs. in lacs Financial Year Particulars FY17 FY18 % Chng. Revenue Transaction Fees 17,222 20,559 19 Admission Fees & Annual Fees 2,643 2,486 (6) Other Income 3,423 2,562 (25) Total revenue 23,288 25,607 10 Expenses Employee benefits 1,548 2,408 56 Technology ex

  39. Slide 39: Financial Highlights - Quarter 1, FY19

    Financial Highlights -Quarter 1, FY19 38 (Rs. In Lacs) Particulars Q1FY18 Q1FY19 Y-o-Y Total Revenue 6,191 7,419 20% Operating Expenses 1,244 1,249 1% EBITDA 4,947 6,170 25% EBITDA Margin (%) 80% 83% 326bps PBT 4,794 5,906 23% Tax 1,656 1,717 4% PAT 3,138 4,189 33% Cash Profit 3,285 4,447 35% EPS -

  40. Slide 40: Detailed Financial - Quarter 1, FY 19

    Detailed Financial - Quarter 1, FY 19 39 Rs. in lacs Quarter Ended Particulars Q1FY18 Q1FY19 % Change Revenue Transaction Fees 4,834 6,145 27 Admission Fees & Annual Fees 636 552 (13) Other Income 721 722 - Total revenue 6,191 7,419 20 Expenses Employee benefits 463 611 32 Other expenses 779 623 (20

  41. Slide 41: Improved Transaction income

    Revenue Breakup Analysis 40 Financial Year Quarterly Improved Transaction income

  42. Slide 42: Top 10 shareholders of IEX

    Top 10 shareholders of IEX (As on 30th June ,2018) 41 % 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 AND ENGINEERING SOLUTIONS PRIVATE LIMITED 4.99% 4 WESTBRIDGE CROSSOVER FUND, LLC 4.75% 5 RIMCO (MAURITIUS

  43. Slide 43: Awards & Accolades

    42 AWARDS & ACCOLADES

  44. Slide 44: Awards & Accolades

    Awards & Accolades 43  “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

  45. Slide 45: Thank You

    44 THANK YOU

Indian Energy Exchange — Investor Presentation (August 2018) on 6ix