Indian Energy Exchange Ltd. · NSE:IEX

Indian Energy Exchange — Investor Presentation (June 2018)

40 slides from Indian Energy Exchange's investor presentation, Jun 15, 2018

  1. Slide 1: Investors Presentation filing letter to BSE and NSE

    INDIAN ENERGY EXCHANGE Dated: June 15, 2018 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

  2. Slide 2: Investor Presentation June 2018

    Investor Presentation June 2018 For Official Use

  3. Slide 3: Exchange: A Competitive 'Market'

    Exchange: A Competitive ‘Market’  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 Power E

  4. Slide 4: IEX, India's leading Power Exchange

    3 IEX, India’s leading Power Exchange  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 separate price discovery for 96 time-blocks of 15 min

  5. Slide 5: Company Snapshot

    4 Company Snapshot Market Share: 97% Average daily trade: 5000+ MW High Participation: 6200+ 3900+ Industries I 50 Discoms (all) I 100+ ESCert Entities 400+ Generators I 1500+ RE Generators & Obligated entities Transparency Liquidity Market Share-FY 18 (DAM & TAM) Average Daily Trade- FY18 Compet

  6. Slide 6: IEX Market Segments

    5 IEX Market Segments 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

  7. Slide 7: IEX Volume Growth: Strong trend line

    6 IEX Volume Growth : Strong trend line 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)

  8. Slide 8: Sector Overview & Impact on Power Exchange

    7 SECTOR OVERVIEW & IMPACT ON POWER EXCHANGE Generation Transmission Distribution

  9. Slide 9: Installed Generation Capacity of India

    8 Installed Generation Capacity of India Generation 400 350 344 327 298 69 300 57 268 39 243 Capacity (GW) 250 32 44 45 223 29 43 7 200 41 6 7 28 26 26 200 41 6 26 24 39 5 24 150 132 39 5 23 5 21 8 20 100 35 185 192 197 4 165 15 145 130 50 112 71 0 End of 10th End of 11th 2012-13 2013-14 2014-15 201

  10. Slide 10: Installed Capacity (March 2018) & Generation (FY 2017-18)

    9 Installed Capacity (March 2018) & Generation (FY 2017-18) 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

  11. Slide 11: High generation, increased competition: pushed prices down at Exchange

    10 Highgeneration, increased competition : Pushed prices down at Exchange Purchase Bid (MW) Sell Bid (MW) Cleared Volume (MW) MCP (Rs/kWh) 5.19 3.56 3.54 3.49 3.51 3.26 2.80 2.73 2.41 1,302 2,371 1,347 2,539 1,571 3,956 2,554 5,741 3,302 4,689 3,212 4,907 6,434 3,878 5,445 8,806 4,547 6,522 8,328 5,

  12. Slide 12: Volume lost due to congestion lowered and price convergence in regions

    11 Volume Lost due to Congestion lowered and price convergence in regions South (S1) North (N2) RoI (W2) 8.00 6.86 Avg MCP (Rs/kWh) 6.00 5.13 4.73 5.11 4.37 3.49 3.79 4.00 3.27 3.13 2.55 3.23 2.77 2.792.58 3.31 3.25 2.00 3.48 3.27 3.07 3.07 3.23 2.52 2.46 2.29 0.00 FY 11 FY 12 FY 13 FY 14 FY 15 FY 1

  13. Slide 13: New Schemes by the GoI

    12 New Schemes by the GoI 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

    13 Per capita consumption very low compared to world average Distribution 13,246 Per Capita consumption 7,289 7,081 kWh 6,486 3,044 3,298 2,438 1075 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 for India

    14 Power Exchange across Globe: 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

    16 India Power Sector I Key Market Segments 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

    17 Short term market snapshot (Billion Units) 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 Report

  19. Slide 19: FY18 Product Wise IEX's Volume Growth

    18 FY18_Product Wise IEX’s Volume Growth (Billion Units) 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

  20. Slide 20: Monthly Price Trend (Avg. MCP)

    19 Monthly Price Trend (Avg. MCP) (Rs./unit) FY2015-16 FY2016-17 FY2017-18 FY 16 : 2.73 5.0 FY 17 : 2.42 FY 18 : 3.26 4.0 4.1 4.1 4.0 3.4 3.2 3.2 3.5 3.2 3.0 2.9 3.1 2.9 2.93.2 2.9 3.0 2.8 2.6 2.6 2.6 2.6 2.5 2.3 2.5 2.7 2.8 3.0 2.5 2.6 2.6 2.6 2.7 2.5 2.7 2.0 2.3 2.1 2.1 1.0 0.0 Apr May Jun Jul Aug

  21. Slide 21: Strong and Growing Base of Participants

    20 Strong and Growing Base of Participants Open Access Volumes have shown rapid growth Average registered participants has been growing 3,000 5000 Drawal (MUs) 4500 2,500 4000 2,000 3500 3000 1,500 2500 2000 1,000 1500 500 1000 500 - 0 Apr'16 Dec'14 Apr'15 Dec'15 Dec'16 Dec'17 Aug'15 Aug'16 Apr'17 A

  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: Bihar Buy Volume on 3rd June 2018

    IEX | Key Growth Drivers for the Power Exchange Market 25 Bihar Buy Volume on 3rd June,2018 1400 1200 1000 Bid Quantity (MW) 800 600 400 200 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: Uttar Pradesh Buy Volume 3rd June 2018

    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: Telangana Sell Volume for May-18

    31-May-18 29-May-18 27 27-May-18 25-May-18 23-May-18 IEX | Key Growth Drivers for the Power Exchange Market Telangana Sell Volume for May-18 21-May-18 19-May-18 17-May-18 15-May-18 13-May-18 11-May-18 9-May-18 7-May-18 5-May-18 3-May-18 1-May-18 35000 30000 25000 20000 15000 10000 0 5000 Bid Quantit

  29. Slide 29: Telangana Sell Volume on 5th May 2018

    IEX | Key Growth Drivers for the Power Exchange Market 28 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

  30. Slide 30: Sembcorp IPP Sell Volume on 9th Oct 2017

    IEX | Key Growth Drivers for the Power Exchange Market 29 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

  31. Slide 31: Key Growth Drivers: Cross border trade, transmission, portfolio optimization

    IEX | Key Growth Drivers for the Power Exchange Market 30 Cross Border ♦ Guidelines of Ministry of Power and CERC draft regulations allow for grid connected neighboring countries like Bhutan, Nepal and Bangladesh to trade power through Trade the Term Ahead Market of the Exchanges ♦ With more transmi

  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: Other Growth Drivers: New products and market segments

    IEX | Other Growth Drivers for the Power Exchange Market 32 New products and market segments Forward and  Participants on Power Exchanges in India currently lack hedging Future options in the form of futures & forwards which are common in Contracts global markets.  With increased liquidity in the

  34. Slide 34: Challenges to growth of Exchanges

    Challenges to growth of Exchanges 33  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 (UP, WB) With separation of content and carriage as expect

  35. Slide 35: Short Term Market Volumes on a rise

    34 Short Term Market Volumes on a rise 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

  36. Slide 36: IEX Volume update for all current product segments

    IEX Volume update for all current product segments vis-à-vis last year 35 Apr-Mar – Million Units Product Category FY 16-17 FY 17-18 % change Day Ahead Market 39783 44,842 13% Term Ahead Market 744 1,372 85% Total Electricity 40527 46214 14% REC 4619 9328 102% ESCert Nil 1299 Total 45146 56841 26%

  37. Slide 37: Stellar Financial Performance: IEX

    Stellar Financial Performance: IEX 36 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

  38. Slide 38: Top shareholders of IEX (As on 31st March 2018)

    Top 10 shareholders of IEX (As on 31st March,2018) 37 % of Total Equity SL No. Name of Shareholder Share Capital 1 TVS SHRIRAM GROWTH FUND 15.00% 2 DCB POWER VENTURES LIMITED 10.00% AGRI POWER AND ENGINEERING SOLUTIONS PRIVATE 3 LIMITED 4.99% 4 WESTBRIDGE CROSSOVER FUND, LLC 4.75% 5 RIMCO (MAURITIUS

  39. Slide 39: Awards & Accolades

    Awards & Accolades 38  “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

  40. Slide 40: Thank You

    39 THANK YOU

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