Indian Energy Exchange Ltd. · NSE:IEX

Indian Energy Exchange — Investor Presentation (February 2019)

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

  1. Slide 1: Investor Presentation

    Investor Presentation FEBRUARY 2019 For Public Use

  2. Slide 2: IEX: India's leading Power Exchange

    IEX: India’s leading Power Exchange 42 BUs of electricity traded in 9M FY19 with an increase of 20% w.r.t. 9M FY18 127.18 Crs PAT in 9M FY19 with an increase of 27% w.r.t. 9M FY18 India’s First & Largest Power Exchange Dominant market share of over 98% of traded volume in electricity Efficient price

  3. Slide 3: 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

  4. Slide 4: 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

  5. Slide 5: Company Snapshot

    Company Snapshot 5 Market Share: 98% Average daily trade: 6000+ MW High Participation: 6400+ 4000+ Industries I 56 Discoms (all) I 100+ ESCert Entities 500+ Generators I 1600+ RE Generators & Obligated entities Transparency Liquidity Competition Market Share-H1 FY 19 (DAM & TAM) Average Daily Tra

  6. Slide 6: 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

  7. Slide 7: 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)

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

    8 SECTOR OVERVIEW & IMPACT ON POWER EXCHANGE Generation Transmission Distribution

  9. Slide 9: Installed Generation Capacity of India

    Installed Generation Capacity of India (All figures in GW) 9 Generation 344 349 327 298 69 74 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 9M

  10. Slide 10: Installed Capacity & Generation - FY18

    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

  11. Slide 11: 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 4.16 4.13 3.79 3.49 3.27 3.13 3.23 3.31 2.55 2.77 2.79 3.25 4.03 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

  12. Slide 12: 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

  13. Slide 13: 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

  14. Slide 14: Power Exchange across Globe: Enormous potential to grow for India

    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

  15. Slide 15: Market Snapshot

    15 MARKET SNAPSHOT

  16. Slide 16: India Power Sector: Key Market Segments

    India Power Sector I Key Market Segments (Ason 31 Nov,2018) st 16 Long Term Short Term 839298 MU OTC: Exchanges: Up to 25 years Real Time Intraday to 1 year Intraday – 11 days 735697 MU 49933 MU 37387 MU 16280 MU 87.7% 6.0% 4.4% 1.9% Exchanges (Only up to 11 days) Long-term Power Bilateral & Banking

  17. Slide 17: Short term market snapshot

    Short term market snapshot (Billion Units) (*As on 31 Nov) st 17 FY 18* FY 19* 4% 808.4 839.3 19% 31% 103.6 86.9 49.9 19% 38.0 37.4 31.4 7% 17.5 16.3 Direct/Banking & Power Exchanges DSM Short Term Total Generation Trader Overall generation in the country, increased by 6.7% in FY 19 till 31st Nov,18

  18. Slide 18: Product Wise IEX's Volume Growth – Q3 FY19 & 9M FY19

    Product Wise IEX’s Volume Growth – Q3 FY19 & 9M FY19 18 Q3_FY 18 Q3_FY 19 9M_FY 18 9M_FY 19 20% 20% 42281 13696 35323 11376 78% 5471 5% 6677 6318 1197 DAM & TAM (MUs) REC('000) DAM & TAM (MUs) REC* ( '000) Decrease in REC volume due to lower inventory

  19. Slide 19: Price Trend: Avg. MCP

    Price Trend : Avg. MCP (Rs./kWh) 19 FY17: 2.42 FY18: 3.26 FY19*: 4.08 7.00 5.94 6.00 5.00 4.67 4.69 3.73 4.09 4.08 4.02 4.00 3.98 3.59 3.46 3.34 3.30 3.23 2.77 2.92 3.55 3.00 2.59 2.49 3.13 3.20 3.00 2.91 2.43 2.46 2.50 2.54 2.56 2.00 2.32 2.31 2.17 2.32 2.32 2.16 1.00 0.00 Apr May Jun Jul Aug Sep O

  20. Slide 20: 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

  21. Slide 21: Opportunities & Challenges for Exchange Operations

    21 OPPORTUNITIES & CHALLENGES FOR EXCHANGE OPERATIONS

  22. Slide 22: 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

  23. Slide 23: 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

  24. Slide 24: Key Growth Drivers: Gujarat Buy Volume

    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

  25. Slide 25: Key Growth Drivers: Uttar Pradesh Buy Volume

    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

  26. Slide 26: Key Growth Drivers: Telangana Sell Volume

    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

  27. Slide 27: Key Growth Drivers: Sembcorp IPP Sell Volume

    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

  28. Slide 28: Key Growth Drivers: Transmission, Portfolio Optimization

    IEX | Key Growth Drivers for the Power Exchange Market 28  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 0.7% in 9M FY 19 in transmission infrastructure  This gives comfort

  29. Slide 29: Key Growth Drivers: Real Time Market and New Market Models

    IEX | Key Growth Drivers for the Power Exchange Market 29  CERC has issued a Discussion Paper on “Re-designing Real Time Electricity Real Time Markets in India” on 25.07.2018, for starting hourly market on exchange. Electricity Market  CERC has issued regulation for establishment of National Open

  30. Slide 30: Key Growth Drivers: Forward & Futures, Green TAM, Gas Exchange

    IEX | Key Growth Drivers for the Power Exchange Market 30  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

  31. Slide 31: 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

  32. Slide 32: 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

  33. Slide 33: Financials

    33 FINANCIALS

  34. Slide 34: 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 Revenue 71 139 174 177 200 233 256 Operating 19 33 38 41 50 55 46 Expenditure Operating Profit 52 106 136 136 150 178 210 (EBITDA) EBITDA 73 76 78 77 75 76 82 PBT 48 93 133 133 147 174 200 PAT 34

  35. Slide 35: Financial Highlights – Quarter III

    Financial Highlights _ Quarter III (Ason 31stDec) 35 (Rs. in Crs) Quarter Ended Particulars Dec’18 Dec’17 Y-o-Y (%) Total Revenue 76.92 70.21 10 Operating Expenses 14.90 12.22 22 EBITDA 62.02 57.99 7 EBITDA Margin (%) 81 83 -1.97 PBT 59.31 54.95 8 Tax 16.69 18.75 -11 PAT 42.62 36.20 18 Cash Profit 4

  36. Slide 36: Detailed Financial – Quarter III

    Detailed Financial _Quarter III (As on 31st Dec) 36 (Rs. in Crs) Quarter Ended Particulars Dec’18 Dec’17 Y-o-Y (%) Revenue Transaction Fees 58.98 58.28 1 Admission & Annual Fees 4.82 6.47 -26 Other Income 13.12 5.46 140 Total revenue 76.92 70.21 10 Expenses Employee benefits 6.63 7.46 -11 Other expe

  37. Slide 37: Revenue Breakup analysis – Quarter III

    Revenue Breakup analysis _ Quarter III (Ason 31stDec) 37 FY18 FY19 Transaction Fees Admission & Annual Fees Other Income Transaction Fees Admission & Annual Fees Other Income 8% 17% 9% 6% 77% 83%

  38. Slide 38: Financial Highlights – 9M

    Financial Highlights _ 9M (As on 31 Dec) st 38 (Rs. in Crs) 9M Ended Particulars Dec’18 Dec’17 Y-o-Y (%) Total Revenue 226.32 193.21 17 Operating Expenses 39.57 33.93 17 EBITDA 186.75 159.28 17 EBITDA Margin (%) 83 82 .08 PBT 178.71 151.76 18 Tax 51.53 51.52 PAT 127.18 100.24 27 Cash Profit 135.05 1

  39. Slide 39: Detailed Financial – 9 Month

    Detailed Financial _ 9 Month (As on 31 Dec) st 39 (Rs. in Crs) 9M Ended Particulars Dec’18 Dec’17 Y-o-Y (%) Revenue Transaction Fees 182.45 156.38 17 Admission & Annual Fees 15.18 18.88 -20 Other Income 28.69 17.95 60 Total revenue 226.32 193.21 17 Expenses Employee benefits 18.66 17.92 4 Other expe

  40. Slide 40: Revenue Breakup analysis – 9 Month

    Revenue Breakup analysis _ 9 Month (As on 31 Dec) st 40 FY18 FY19 Transaction Fees Admission & Annual Fees Other Income Transaction Fees Admission & Annual Fees Other Income 9% 12% 10% 7% 81% 81%

  41. Slide 41: Top 10 shareholders of IEX

    Top 10 shareholders of IEX (Ason 31 Dec,2018) st 41 % of Total Equity S. No. Name of Shareholder Share Capital 1 TVS SHRIRAM GROWTH FUND 1B LLP 15.00 2 DCB POWER VENTURES LIMITED 10.00 AGRI POWER AND ENGINEERING SOLUTIONS PRIVATE 4.99 3 LIMITED 4 WESTBRIDGE CROSSOVER FUND, LLC 4.75 5 SMALLCAP WORLD

  42. Slide 42: Awards & Accolades

    42 AWARDS & ACCOLADES

  43. Slide 43: Awards & Accolades

    Awards & Accolades 43  “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 Power Market Development”- 2014 I 2015 Council of Power Utilities 

  44. Slide 44: Thank You

    44 THANK YOU

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