Indian Energy Exchange (IEX)

Hi (a Noob question) with the summers approaching, should it not lead to a seasonal volume boost in this quarter ? I don’t think I could make out by looking at the previous years data to see any correlation…

2 Likes
1 Like


Not just YoY numbers show improved Net Profit, even QoQ numbers show improvements. I did not get which parameter you refer to for flat numbers. Are you referring to revenue?
Also, I did not get the relationship between fuel prices and trading volume of the power. Can you elaborate on that?

2 Likes

The Profits increased becos of other income which is an one time income, hene the perforamnce is flat or slightly negative


2 Likes

“On March 21, 2022, the CERC had notified Fifth Amendment in the Open Access In Inter-State
Transmission Regulations and subsequently it approved the Procedure regarding the National
Open Access Registry (NOAR) – a centralized automated tech based platform for facilitating
open access, to be hosted, operated and implemented by POSOCO with effect from Sunday
May 1, 2022.
In a leadership move, IEX successfully integrated its platform with NOAR on Sunday 1 May’22
for all the market segments - DAM, G-DAM, RTM, TAM, and G-TAM. Going forward, registration
in NOAR will be a prerequisite for both collective as well as the bilateral transactions in the shortterm power market. The NOAR will facilitate seamless communication, process simplification,
greater transparency, elimination of scope of human intervention, thereby unleashing greater
efficiency and facilitating the power market development.”

9 Likes

IEX Latest Concall Key Points:-

Positives in Numbers -

  1. Volumes traded at ATH of 102 billion units in FY 2022. 37% increase YOY. Total consumption in India - 1370 Billion Units (7.8% YOU growth).

  2. Market share of IEX out of total generation is 7%. GOI aims to take the short term market to 25% in the next 3-4 years.

  3. Conventional market (DAM,TAM,etc.) remains the leader with 90 Billion Units. 24% increase YOY.

  4. Green market - approx 5 billion units, 530% increase YOY.

  5. Gas exchange has broken even and earned PAT of Rs 1.8 Cr. Volumes 12Mn against 0.2Mn in FY 2021.

  6. Revenue 478 Cr, up 34% YOY. PAT 2.5 Cr, up 42% YOY. Margins 63%.

Negatives in Numbers -

  1. Open access volume was only 8% (decline from last year).

  2. Management doesn’t intend to increase charges in near future. (Currently at 2 paisa per buy and 2 paisa per sell).

Management Guidance -

  1. Volume growth guidance of 20-25% for next year.

  2. Nepal & Bhutan participating in cross border trades. Bangladesh is likely to start participating from this year.

  3. Plan to commence API (Application Programming Interface) based automated bidding for DAM, GDAM and REC segments. Shortly launching web based bidding platform to enable market participants experience Anytime Anywhere Easy and Secure bidding on platform

  4. Bid creation tool for customers to make it very easy and fast to create bulk bid details to upload on the exchange platform.

  5. Aim to provide advanced data analytics as well as new technologies such as Robotic Process Automation to eliminate human dependency in processes.

  6. When asked about MBED, Mr SN Goel seemed frustrated/irritated.

New Products -

  1. Long Duration Contracts

  2. Gross Bidding

  3. Tertiary Ancillary Services

  4. National Open Access Registry

(Yet to fully study these products)

Disc. Invested.

6 Likes

4 Likes

Discoms are bleeding. If discoms do not buy this power, these plants will still have to operate but sell electricity on the power exchanges. Guess the probability of them selling at the exchanges are more realistic

7 Likes
7 Likes
3 Likes

Once MBED is in full form, these “short term phenomenons” will become a norm and growth will only be decided by volumes. Margins are bound to take a hit and “platforms” might become a “commodity”. This seems to be the biggest anti-thesis and everyone is probably aware of it.
Sharing above since I have recently started studying the business and this kind of trumps all positive narratives that have been fueling the story. Am I being overly pessimistic ?

Quote:

To avoid that high price in the market, they capped the price. The capping of the price in the efficient market led to no price discovery on the exchange platform. And this has led to buyers shifting on the alternate platforms. This is something which has happened now, but I believe this is a phenomenon, for a short period.

Page 6

Disc: Not invested but studying this as this trend is not short lived and thus being studied as a possible very long term portfolio holding.

2 Likes

As per the recent concall and meet with ubs analysts , mbed is not being talked about and is in a limbo. It will take atleast 2 years to implement if started today as per M.D

MBED is not even a distant possibility as of now.

1 Like

Fully agree. In fact, I don’t see MBED coming in for at least 3 years, I was just referring to a generalisation of what happened this quarter(capping of price which stopped price discovery and IEX no longer remained a “platform”) , become a normality.
This number 3 was calculated from a lot of approvals coming in without any hiccups and state governments behaving as one nation :joy:)

Solar / Renewable / Green energy is indeed a Megatrend. It is equivalent to JIO moment…

ET NOW on Twitter: “.@MinOfPower, @RajKSinghIndia announced that consumers can demand discoms to provide #Greenpower. Addressing the media, the minister once again reiterated that #India is promoting green energy. He also urged the industry to announce green energy consumption targets https://t.co/JitMJSZHWl” / Twitter

Not sure on the impact. As per management during the con-call, they said competitor can’t match IEX offerings as IEX is taking feedback from clients and continuously adding more products/offerings.

MBED is far form reality thing. Even IEX is also believe so. It may never implemented.

good news for IEX

8 Likes

8 Likes

If you see last five years trend, bilateral market has grown by just 1.5%, on the other hand exchange share has grown by 18%.
The rates for exchange are fixed. Opex is not likely to increase much. So, in my view, margins may remain flat, but will not take a hit.

2 Likes

Interesting.

5 Likes