- IEX achieves 37% YoY volume growth in Q3 FY’22.
- Profit after tax grows 39% YoY.
- Exchange announces interim dividend of 100%.
- Subsidiary company – IGX, achieves breakeven in Q3 FY’22, within one year of authorization.
The key highlights of the unaudited financial results* for the third quarter ended December 31, 2021, as declared by the Company on 24 January 2022, are as below:
* All amounts are represented in Crores
POWER SECTOR HIGHLIGHTS
In the third quarter of the fiscal year 2022, India has seen good growth in economic and industrial activities. This increase in activity also spurred the demand for electricity. The national electricity consumption stood at 321 BU during the quarter, registering a 5% CAGR growth over the last 2 years.
In December 2021, India’s installed power generation capacity reached 393 GW seeing 4.8% YoY growth. The renewable energy capacity including large hydro reached 151 GW from 137 GW in the fiscal year 2020, achieving 10.5% YoY growth. The share of renewables in India’s total capacity base has increased to 38% aligned to India’s commitment at COP26 Summit in Glasgow, where an ambitious target of achieving 500GW of renewable energy by 2030 was announced.
BUSINESS AND FINANCIAL PERFORMANCE HIGHLIGHTS
On a standalone basis, revenue for the quarter increased by 32.4%, from Rs. 95.7 Cr. in Q3FY’21 to Rs. 126.7 Cr. in Q3FY’22. The PAT grew by 33% YoY from Rs 60.1 Cr in Q3FY’21 to Rs 79.9cr in Q3FY’22, with a margin of 63.1%. The company has announced an interim dividend of 100% per equity share.
During the quarter, volumes on the Exchange grew by 37% YoY with 27.6 BU volumes traded versus 20.1BU in Q3 FY’21. The growth in volumes was driven by a substantial increase in electricity consumption as well as the resurgence of trading in REC’s and ESCERT’s.
The Real-Time Market continues to be one of the fastest-growing electricity market segments on the Exchange, achieving a growth of 70% YoY with 4.8 BU of volumes traded during the quarter.
The green market, including the day ahead and term ahead market, cumulatively traded 1.2 BU during the quarter and contributed 5% to overall electricity volumes.
On the REC front, a total of 38.28 lakh certificates, and a total of 2.86 lakh Energy Saving Certificates were traded during the quarter.
On a 9-month basis, total volumes on the Exchange grew by 43.4% YoY with 74.9 BU volumes traded in 9M FY’22 versus 52.2BU in 9M FY’21. On a standalone basis, revenue for the 9M FY’22 increased by 37%, from Rs. 255.6 Cr. in 9M FY’21 to Rs. 350.1 Cr. in 9M FY’22. PAT grew by 48.1% YoY from Rs 149.7 Cr in 9MFY’21 to Rs 221.6 Cr in 9MFY’22, with a margin of 63.3%.
The Exchange is now gearing to launch the Longer Duration delivery contracts in the electricity and renewable segment.
On the gas market front, the Indian Gas Exchange IGX has been achieving consistent growth in terms of volumes as well as eco-system development. During the quarter, IGX achieved break-even, within one year of securing PNGRB authorisation in December’20. In Q3 2021, IGX recorded trade volumes of 3.6 million MMBtu. Cumulatively 5 million MMBtu was traded through IGX during the year. More recently, IOCL has joined IGX as its new strategic partner. With the increasing volumes and participants, IGX is well on its way to substantially contributing towards the Government’s goal of achieving a 15 % share of the country’s overall energy mix for natural gas by 2030.
POLICY AND REGULATORY UPDATES
From the policy and regulatory perspective, on 16 December 2021, CERC issued the draft Connectivity and General Network Access (GNA) to the inter-State Transmission System Regulations, 2021. This initiative is expected to simplify the transmission access availability for the participants on the Exchange. Implementation of GNA is also expected to ease the participation on the Exchange platform as the decision to participate will no longer be contingent upon transmission access and charges. GNA will promote the development of the power market in the country.
Further, the resolution of the decade long-pending jurisdictional conflict between the CERC and SEBI in respect of the jurisdiction of long duration forwards paved the way for the introduction of much awaited long-duration delivery contracts on the Power Exchanges under the regulatory jurisdiction of CERC and also the introduction of the electricity derivatives on the commodity exchanges under the jurisdiction of SEBI. Electricity derivatives will smoothen out the price volatility and also buyers will be able to hedge their positions and take delivery in spot markets. This will lead to an increase in Exchange transactions. Following this development, IEX has already applied for approval of longer duration contracts to CERC.
The Central Electricity Regulatory Commission also issued the draft Deviation Settlement Mechanism (DSM) and Related Matters Regulations, 2021, linking the DSM charges to the time block-wise price discovered on the Exchange. Implementation of this initiative will help to further deepen the real-time market.
The National Open Access Registry (NOAR) is also likely to be implemented in the fiscal year 2022. NOAR will automate the processing of open access and considerably reduce the lead time taken in the various procedures. This will also make the transmission allocation more transparent and efficient.
Going forward, IEX stands committed to facilitate India’s power sector transformation driven by the energy markets which play a pivotal role in building India’s sustainable and efficient energy future working in collaboration with the government, regulators, customers, and other stakeholders.