IEX Achieves Robust Volume of 96.8 BU in FY ’23; Reports INR 305.9 Crore PAT with a Slight YoY Decline of 0.9%

Indian Energy Exchange (IEX) has released its audited financial results for the fourth quarter and the fiscal year ending on March 31, 2023.

The key highlights of the audited consolidated financial results* as declared by the Company on May 25, 2023, are:

(* All amounts represented in the table are in Rs Crores)

*The Indian Gas Exchange (IGX) was a subsidiary of Indian Energy Exchange (IEX) till 16th Jan 2022. IGX became an Associate Company of IEX w.e.f 17 Jan 2022 and was consolidated basis of Equity method in above numbers.

BUSINESS AND FINANCIAL PERFORMANCE HIGHLIGHTS

During Q4 FY’23, IEX achieved overall volume of 26 BUs registering a 7.9% QoQ growth. Total certificates traded during Q4 FY’23 amounted to 1.8 BUs, a 50% QoQ increase. However, total volumes declined by 3.3% in Q4 FY’23 as compared to Q4 FY’22 due to supply-side constraints. The average Day Ahead Market price during the quarter was Rs.6.07/unit, higher by 13% on YoY basis. 

On a consolidated basis, revenue for Q4 FY23 increased 10.5% on QoQ basis, from Rs 117.4Cr in Q3 FY23 to Rs 129.6Cr in this quarter. However, despite a decline in traded volumes in Q4 FY’23 as compared to Q4 FY’22, total revenue for Q4 FY23 witnessed a growth of 1% on YoY basis. Consolidated PAT at Rs 88.3Cr grew 14% on QoQ basis as compared to Rs 77.2 Cr in Q3 FY23.

For the fiscal year 2023, IEX traded 96.8 BU, a decline of 5% YoY due to sell-side liquidity constraints. During the year, certificates’ volume was at 6.2 BUs. For the fiscal year 2023, the Day Ahead price was Rs. 5.96/ unit, higher by 36% YoY, due to demand-supply mismatch. Liquidity was affected due to supply constraints that led to higher prices of e-auction coal, imported coal and gas.

For the full fiscal year 2023, on a consolidated basis, revenue declined by 2.1% on a YoY basis, from Rs 484.4cr in FY 2022 to Rs 474.1cr in FY 2023. Consolidated PAT at Rs 305.9 Cr de-grew 0.9% on YoY basis as compared to Rs 308.6 Cr in FY22. The Indian Gas Exchange (IGX) was a subsidiary of Indian Energy Exchange (IEX) till 16th Jan 2022. IGX became an Associate Company of IEX w.e.f 17 Jan 2022 and was consolidated basis of Equity method in above numbers.

For fiscal year 2023, the Board of Directors of the Company announced a final dividend of Rs.1/- equivalent to 100% of the face value of equity shares. During the year, Company also did a buyback of equity shares from the open market route, amounting to Rs. 98 crores. Consequently, during the buyback period, the Company purchased and extinguished a total of 69.7 lakh equity shares from the stock exchange comprising 0.78% of the pre-buyback paid up equity share capital of the Company.

With gradual improvement in domestic production of coal, improvement in coal inventory, which is at 14 days compared with 11 days last fiscal, lowering prices of e-auction coal, imported coal, and imported gas, we expect lower clearing prices of power on the Exchange, and the volumes to improve on the back of cost optimization by Discoms and Open Access consumers.

On the Gas market front, IGX traded nearly 50.9 million MMBtu of Gas volumes in FY 2022-23, registering a 319% growth on YoY basis.  A total of 2,355 trades were executed during the fiscal, an increase of 432% YoY. The profitability of IGX for FY23 increased to Rs 28Cr from Rs 1.75Cr in FY22.

This fiscal, IEX formed a wholly-owned subsidiary – the International Carbon Exchange (ICX). ICX will leverage opportunities in the voluntary carbon market and lead to transparent and optimal price discovery for carbon credits.

IEX commends the initiative of the Ministry of Power for its recent report ‘Development of Electricity Market in India’. Power Markets will have an instrumental role to play in accelerating India’s energy transition by enabling smooth integration of renewable energy into the grid. Additionally, the inefficiency and inflexibility of long-term PPAs have been recognized. A stronger role of power exchanges will deepen the market and enable efficiency in electricity procurement. The directive to develop new RE capacity based on the Contract for Difference (CfD) methodology will protect the revenue of generators and increase investor confidence, leading to faster capacity addition. We are confident that the implementation of this ‘Report of the Group on Development of Electricity Market in India’ will fast-track India’s energy transition goals through an efficient, optimal, and reliable market framework.

Going forward, IEX will continue to work towards building a sustainable and efficient energy future for India. The company will continue to explore business opportunities in new products and markets.

POWER SECTOR HIGHLIGHTS UPDATE

During the year, fuel supply constraints due to the Russia – Ukraine war led to several countries facing a severe liquidity crunch. Heat waves in various parts of the world increased power demand, which coupled with rising input fuel costs, led to high electricity prices in almost all major economies. A similar situation prevailed in India. Electricity consumption in FY ’23 surged to 1,504 BU, a 9.4% YoY growth, due to increased industrial activity, the hottest summer months in over 120 years, which, coupled with supply side constraints led to high power prices being discovered on the Power Exchanges. Installed capacity in India achieved 416 GW as on 31^st March 2023, led by renewable capacity addition of 15 GW to 172GW. This growth of green energy is expected to help India attain its vision of achieving 50% of its entire energy consumption from non-fossil fuel sources by 2030.