Ladies and gentlemen, good day and welcome to Indian Energy Exchange Q1 FY 2026 earnings conference call hosted by Axis Capital. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Rohan Gheewala . Thank you.
Thank you, Pari. Good afternoon, ladies and gentlemen. On behalf of Axis Capital, I am pleased to welcome you all for the IEX Q1 FY 2026 earnings conference call. We have with us the management team of Indian Energy Exchange Ltd, which is represented by Mr. Rohit Bajaj, Joint Managing Director; Mr. Satyanarayan Goel, Chairman and Managing Director; Mr. Vineet Harlalka, Chief Financial Officer and Company Secretary; Mr. Amit Kumar, Head of Market Operations and Exchange Technology; and Ms. Aparna Garg, Head of Investor Relations and Corporate Communications. We will begin with the opening remarks from Mr. Rohit Bajaj, followed by an interactive Q&A session. Thank you, and over to you, sir.
Good evening, friends. I welcome you all to the IEX earnings call for Q1 FY 2026. With me today on this call are Mr. Satyanarayan Goel, CMD IEX; Mr. Vineet Harlalka, CFO and Company Secretary; Mr. Amit Kumar, Head of Market Operations and Exchange Technology; Ms. Aparna Garg, Head of Investor Relations and Corporate Communications; and Mr. Aditya Wali. Friends, the Indian economy continues to stand out as the world's fastest growing major economy, registering a robust growth rate of 6.5% in FY 2025. Notably, India recently became the fourth largest global economy, surpassing Japan. This remarkable trajectory has been underpinned by resilient domestic demand, strong investment activity, and a steady expansion of both industrial as well as service sectors. Despite global uncertainties from ongoing policy changes and geopolitical tensions, India remains a source of stability and opportunity in the international landscape.
High-frequency indicators, as reported by the Reserve Bank of India, reveal sustained momentum in both manufacturing and service sectors. Looking ahead, the Indian Meteorological Department has maintained its quota of an above-normal monsoon for the June to September 2025 period, with rainfall expected at 106% of the long-term period average. This bodes well for the aggregate sectors, potentially boosting rural income and supporting broader production trends. In addition, the RBI has maintained its real GDP forecast at 6.5% for FY 2026. Overall, India's macroeconomic outlook remains bright, supported by a balanced approach to growth, financial stability, and inclusive development. On the power sector front, India's peak solar power demand in 2025 reached 242 GW in June 2025. This peak demand was met without any power shortages, thanks to the proactive government measures.
These included expanding Section 11 of the Electricity Act, mandating imported coal-based plants to run at full capacity till June end, activating gas-based power plants, and ensuring sufficient domestic coal supply. Weather played a key role this quarter, despite forecasts of intense summer leading to a peak demand expectation of 277 GW. Early monsoon and widespread unseasonal rain kept temperatures low, resulting in lower than expected power demand. India's power consumption of 44.6 billion units in Q1 FY 2026 was lower by 1.3% as compared with Q1 FY 2025. On the fuel side, chemical fuel has been available at competitive prices. India's coal production reached 247 million tons in the first quarter of FY 2026, similar to production during the same period last quarter. Coal inventory as of mid-July 2025 stood at a high of 25 days.
For the quarter, imported coal price for 4,200 GAR coal remains steady at around $1.50 per ton, lower by 9% as compared with the same period last quarter. Prices of imported gas have also remained stable at nearly $1.11 per MMBtu in the first quarter of this system. Overall, the fuel situation for the sector has remained comfortable in Q1 FY 2026. Friends, while there was lower than expected power demand in Q1 FY 2026, the EA expects power demand in the country to grow at a rate of 6% per annum till 2032. Based on this, MOP has been regularly monitoring the roadmap of thermal capacity addition of 18 GW by 2032. The MOP has also been lending policy support to energy storage solutions, such as pump storage and battery storage, to meet peak demand and also enable renewable power integration with the grid.
To support battery energy storage solutions, BESS, the Ministry of Power has finalized two branches of viability gap funding mechanisms. Under the first branch, 13,200 MWh of BESS projects are currently being implemented across the country, and about 9,750 MWh of BESS projects have been awarded, and another 5,000 MWh are in the pipeline. More recently, under the second branch of VGF, approval has been granted for further 30,000 MWh of BESS projects to be implemented. As per the CEA, BESS-based storage of 47 GW shall be required by FY 2032. The increased activity in BESS tenders has been driven by a reduction in battery CapEx costs and declining storage costs. As recently as June 2025, NVVN and NHPC both discovered INR 2.16 lakh per megawatt per month and INR 2.08 lakh per MW per month for 500 MW through our two cycle tenders under the VGF mechanisms effectively.
As we have mentioned earlier as well, BESS would be able to store surplus power during daytime to deliver electricity during hours of peak demand while leveraging power exchanges. This would increase liquidity and potentially increase volume on exchanges during daytime as well as during evening hours. Let us now talk about a few important regulatory updates and policy initiatives that continue to be conducive for power market development. The Cabinet Committee on Economic Affairs revised the SFP policy for coal allocation to thermal power plants. The existing policy replaced the earlier policy and has attempted to make it more flexible and transparent for the power sector. In the new policy, fixed coal allocation is now available under two windows, one for central and state GENCOs at notified price and another for GENCOs at a premium above notified price.
The policy paves the way for coal linkages to generators even without PPAs, generating unrequisitioned surplus URS power, which can then be sold in the power markets. The revised policy would ensure continued availability of adequate fuel supply for thermal generators and help maintain liquidity on exchanges for competitive price discovery. In FY 2025, in a draft order, CERC proposed various changes in the design of the term-ahead market across exchanges to help improve liquidity and transparency in the investment. In its order in April 2025, the CERC streamlined timelines for completion of various stages of any given single-side ADSS contract across exchanges. Other proposals include notifying predefined time slots for trade-under-time contracts. Public consultation for these predefined slots has been conducted, and a petition has been filed before the CERC for approval of the same.
In this order, the regulator also proposed modification in the price discovery mechanism of the day-ahead contingency segment from the current continuous matching to uniform price check options through draft amendments in the Power Market Regulation 2021. These amendments are open to stakeholder comments till July 2025. In May 2025, CERC issued draft guidelines for virtual power purchase agreements, VPPAs. These guidelines recognize power exchanges as an authorized platform for sale of electricity by RE generator under VPPA arrangements. Renewable generators entering VPPAs may sell the electricity component in the collective segment on power exchanges. This would help increase volume on exchange. Recently, the CERC issued draft amendments to the deviation settlement mechanism regulation with regards to infirm power charges for thermal station. Earlier, thermal generators could not recover payment before the trial run, but with the draft amendment, they are assured of payment of its ceiling price.
With these amendments, RE infirm power can also come to market before its commercial operation date. These amendments by CERC are designed to refine BESS, ensuring a clear framework for managing informed power injections and promoting stable grid operations under varying frequency conditions. Further, through the approval in February 2025 of SEBI and CERC to introduce electricity derivatives in India, the much-awaited electricity future contracts will begin trading on MCX and NSE respectively earlier in June 2025. The launch of electricity derivatives is expected to benefit spot market participants, allowing them to hedge against any volatility in the market. With the availability of hedging instruments, the spot market will also benefit through higher participation and volume spillover. CERC recently issued an order on implementing market coupling. The order was issued on 23rd July, in which the regulator has decided to initiate process of implementation of market coupling of day-ahead markets.
This is to be done by February 2026, as per the order. In the same order, it is mentioned that coupling of the Real-Time Market will be considered at a later stage. The order also talked about running a shadow pilot for coupling of the term-ahead market and stakeholder consultation for RTM check coupling. Further in the order, CERC directed its staff to initiate consultation with Grid India and all exchanges on operational and procedural aspects of the day-ahead market coupling, including identifying and proposing amendments required in the various regulations. During Q1 FY 2026, IEX recorded electricity trading volume of 32.4 billion units, a growth of 15% on YoY basis. Revenue for the company grew by 19.2% YoY, increasing from INR 154.5 crore in Q1 FY 2025 to INR 184.2 crore in Q1 FY 2026.
PAT increased by 25.2%, rising from INR 96.4 crore in Q1 FY 2025 to INR 120.7 crore in Q1 FY 2026. The robust performance in Q1 FY 2026 was led by a substantial cell availability due to weather conditions and also measures undertaken by the government and the regulators. In Q1, nearly 5.3 million Renewable Energy Certificates were traded, recording a growth of nearly 150% over the same quarter last year. Due to efforts of the Bureau of Energy Efficiency, compliance by a designated consumer to meet their RPO targets has increased. The Real-Time Market segment continued to demonstrate strong growth. For Q1 FY 2026, RTM volumes by nearly 13 billion units were higher by 41% on a year-on-year basis, highlighting the segment's critical role in helping discom and open-access consumers efficiently manage their short-term requirements. RTM's availability to offer flexibility and industry responsiveness underlines the opportunity to efficiently integrate renewables with the grid.
Green market volume in Q1 FY 2026 rose 51% YoY to 2.7 billion units compared with Q1 FY 2025. This segment advances integration of clean sources such as solar and wind into the grid and helps obligated entities, including discom, meet their renewable purchase obligations. With an increase in hydro, wind, and sustained supply from coal-based generation, supply liquidity on power exchanges improved and drove prices down. In Q1 FY 2026, supply liquidity in the day-ahead market of IEX increased 45.2% on YoY basis. As a result, the average day-ahead market price was INR 4.41 per unit, down 16% YoY, while price in the Real-Time Market averaged at INR 3.91 per unit, a 20% drop. On May 25, heavy rains pushed RTM prices down to INR 1.53 per unit on an average basis, with nearly zero price during several time blocks.
In terms of new products, we continue to await approval from the CERC on our petition to extend the term-ahead market contract from 3- 11 months. As mentioned previously, hearing for our petition on the green RTM segment with the CERC has already been completed, and public comments on the petition have also been closed. We await a final order on the matter. Green RTM would provide an opportunity to reduce deviation exposure due to weather events by providing an avenue to trade green power on IEX graphs. IGX traded record gas volume of 24.6 million MMBtu in Q1 FY 2026, a growth of 109% over Q1 FY 2025, led by demand push from oil marketing companies, refineries, and city gas distribution companies. The quarter was also witness to first trade in the three to six-month long duration contract, underlining market confidence in long-term gas trading on IGX.
In Q1 FY 2026, IGX recorded a profit after tax of INR 14.1 crore, which was higher by nearly 86.7% compared with INR 7.6 crore in Q1 FY 2025. As gas prices continue their downturn and policy initiatives continue to remain positive in the sector, volume at IGX would continue to be robust. Friends, as IMD estimates, India was to experience hotter than usual temperatures from April to June this year. However, the advent of early monsoons meant lower peak demand than forecasted. Nonetheless, with sealed forecasts of peak demand at 366 GW by 2032, the power consumption to reach nearly 2,500 BU demand growth will continue to drive exchange volume growth. In addition, policy measures undertaken by the government and the regulator to ease supply-side liquidity will effectively further rationalize for prices on exchange. Our diversification initiatives are also gradually gathering momentum.
For the first quarter of FY 2026, the International Carbon Exchange, ICX, issued over 44 lakhs. I-REC compared with 5.9 million I-REC issued in the previous financial year. Revenue for ICX in Q1 FY 2026 stood at INR 178.8 lakhs. The I-REC is a globally recognized digital certificate that serves as a transferable tool for the generation of 1 MWh of energy from renewable sources. Through ICX, we have also filed an extension of interest with the Central Pollution Control Board for developing the extended producer responsibility EPR trading platform and are awaiting final results of the EOI. Our formation of coal exchange stakeholder comments has been closed. On the formation of coal exchange stakeholder comments have been closed, and we await further directives with regards to legislation changes to the Mine and Mineral Development Regulation Act.
The MMDRA amendment bill 2025 is scheduled to be brought discussion in on the session of the Parliament. The power sector is undergoing changes with the development of new market models in the form of battery storage arbitrage, some in the dispatcher of renewable energies, virtual power purchase agreements, and the introduction of electricity derivatives. These market models and instruments are slated to be the future drivers to deepen India's power market and eventually ensure a successful energy transition. As India marches towards achieving its net zero targets, there is bound to be a much larger role of power exchanges in the country's energy landscape. Thank you, and now we can have questions and answers.
Thank you very much. We will now begin the question -and-answer session. Anyone who wishes to ask a question, you may press star and one on your touchstone phone. If you wish to remove your phone from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue ascends. The first question is from the line of Bharanidhar Vijayakumar from Avendus Spark. Please go ahead.
Yeah, good afternoon. Am I audible?
Yes, we can hear you.
Yeah, congratulations on a good set of numbers. My first question is on market coupling. Could you refresh us regarding the advantages that IEX has over its competitors, which helped it to have a near 100% market share in the RTM segment, and also why the competitors were not able to replicate this? If they would be able to gain market share now after markets have been implemented, this is my first question.
Yeah, I mean, IEX has maintained a leadership position in the day-ahead and Real-Time Market over the years. In the day-ahead market, in fact, over the last 17 years, we have a leadership position. If you see, initially, the other exchange also had some reasonable market share of 20%, 25%, but over the years, they even lost that. We could have more than 95% change of market share. This has happened because of many factors. There is not one reason, but many factors. One is we have a very, very robust technology platform. We have introduced new products ahead of our competitors. We have done a lot of activities with the customers. We regularly interact with the customers, understand their problems, tell them how we can use the exchange to purchase cheaper power, and optimize the power procurement cost. We interact with the State Regulatory Commission.
In fact, we are on the advisory board of more than 12 State Regulatory Commissions. We advise them how exchanges can be used, power markets can be used for the benefit of distribution companies. We provide a lot of data analytics to our customers. We have a very robust technology platform. Our IT infrastructure is very robust in spite of too many cybersecurity attacks. So far, on the IEX platform, there has not been a single penetration. It's a come together of all these activities because of which we have been able to have a significantly large market share in the exchange in the day-ahead market and the Real-Time Market. Going forward, even after market coupling also, I am sure we will continue to do all these activities and maybe even more to ensure that the customers stick to us and the customer loyalty is maintained.
I am very sure that we will be able to maintain definitely a larger market share even after the coupling.
Okay, okay, sir. My second question is on the trader members who trade on behalf of their clients and submit bids to IEX. Like one significant trader member is CPT India. I wanted to know what percent of volumes overall for IEX and specifically in day-ahead markets that PTC India as a trader member contributes because being an investor in one of our competitors, post-market coupling, I just wanted to see if they can shift this to that competitor. I just wanted to know how much of it will be impacted.
As per the power market regulation, a trader member, if he is holding more than 5% equity, then he cannot trade in that exchange. Since PTC is holding 25% equity in the competing exchange and also on the board of that exchange, they cannot trade on that exchange. However, their percentage share is almost about 10%-1 2% on IEX's platform.
Great. Okay, thank you so much. I'll come back in a few seconds.
Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Thanks for the opportunity. Your clarifications on the technological edge that IEX has and your other advantages versus competing exchanges are well received. Do you see competition using transaction fee as a tool to take market share in day-ahead market post-market coupling?
We will deal with that when we reach there. Why do I worry about that right now? I don't think customers really will value that part of it, because the transaction fee is a very, very small component of the total power procurement cost. If that is the case, then we will deal with that also.
Okay, because if they are not able to overcome your barrier of having a tax advantage and a cut price by 5% or 10%, you would have to follow suit in order to retain market share. Is that the right understanding?
I told you that. We will deal with the situation when we reach there. If we have to do that, we will do that.
Would day-ahead market also include GDAM?
Today it is DAM only, day-ahead market only.
Because green day-ahead market would not be part of the overall day-ahead market, that would be impacted.
It is ambiguous in the order.
Yeah, it's not mentioned there.
Yes, it's not mentioned.
Based on the current status of technological progress that Grid India might have made, do you foresee the January 2026 timeline as being implementable? Where or when do you see the Real-Time Market also forming part or progress on the Real-Time Market to come under the ambit of market coupling, if at all?
First of all, as per the implementation of market coupling in the day-ahead market segment is concerned, there are a lot of things to be done. One of the things is basically you need a common software for all three exchanges, the IT infrastructure for all three exchanges to be compatible. You need the tiering and settlement mechanism. We have to work out that part of it. In fact, also at the commission time, they have to formulate regulations for implementation of market coupling. All these things will need time. Let's see. I mean, I will not like to comment on this whether January 2026 is feasible or not. Based on the activities involved, I feel that it may take a longer time. That is about the day-ahead market.
As far as the Real-Time Market is concerned, I'm reading out from the order, given the shorter time for bid submission and running the market tiering engine, the decision to implement the coupling of Real-Time Market of power exchanges shall be considered at a later stage. There is no decision. The decision will be considered at a later stage after gaining operational experience from the coupling of the day-ahead market. In this order, they have not taken any decision about the Real-Time Market.
Sure. Finally, any comments from your side? Are we any closer to end point now that market coupling has been put in place for day-ahead market?
I think that is something which the regulator will have to decide about it. That is a much bigger issue. Let's hope that happens.
Thank you.
Thank you.
Thank you. Ladies and gentlemen, please limit to two questions per participant and come back in the queue for the follow-up questions. Thank you. The next question is from the line of Vikas Jain from FQ. Please go ahead.
Hi. Good afternoon, sir. Thank you for the opportunity to ask the question. Am I audible?
Yes, loud and clear.
Yeah, my question is regarding the recent order by CERC for the market coupling. Is there any mention of MBED in the order that has been recently received? Any comments or any insights on that part of the market coupling?
There is no mention about MBED in the order.
Is it likely that that would follow up from CERC or there is no hope that MBED will be implemented? What is the management's view from IEX on this one?
I can't say about that.
Okay.
I wish regulatory commissions take up that issue. I wish that happened.
All right. Thank you so much.
Thank you. The next question is from the line of Kunal Thanvi from Banyan Tree Advisors.
Opportunity.
Go ahead.
Yeah, thanks for the opportunity. My questions were related to market coupling. I had a few questions around that. One, if you can explain to us how this regulation that has come up, how it is going to play out. Our understanding was that all the bid would be given to one exchange in a particular time and the prices would be distributed there. The price discovery that used to happen on IEX will now happen across the three exchanges, right? Because of that, is there any possibility of changing the pricing regulations by the regulator himself? If you can throw some light.
All this will be part of the various operational and procedural aspects, which need to be decided by the commission.
Sure.
There are a lot of things like this which need to be decided.
Sure. So.
You can do this one.
At this point, the only clarity is that, you know, market coupling is being implemented and it will, all for the day-ahead market. That is the only clarity we have, right?
Yes, you are right.
Sure. The second question was, you know, when market coupling was first talked about, like four or five years back when the first draft had come, the idea was that market coupling would be a good tool for expanding the market and long-term and PPAs would also come through. Any thoughts that you would want to share? If in the form and shape that the current regulation talks about, if it was to get implemented, what are the benefits to the customer's ecosystem that would come through?
What you're asking is basically MBED. As far as MBED is concerned, there is no mention of MBED in the product, and we are not sure when this will be taken up by the commission.
Is this from the current form that gets implemented, what are the benefits to the ecosystem?
We don't see any benefits, but then it is a regulatory decision.
Is there a possibility that, you know, there could be a confusion among the ecosystem because of free exchanges?
Confusion in what aspects?
For example, we have 95% market share, right? If our customers were to kind of trade on the exchange, they will continue to come on IEX and then the orders get pulled to some other exchange. This is how it will be. Our customers will continue to be yours.
I wish that. I'm sure the kind of effort we are making, we will like to maintain that. We would like to ensure that the customers remain with us.
Okay. It's from a client perspective, right? You talked about there are numerous things that play a role in terms of value addition that you provide to the customer, including, say, technology and the support and the long-term relationships. The role that price discovery plays when you are kind of, you know, when customers come to buy power on the exchange. The reason I ask this question is, if you see historically, the demand on the exchange, the volumes on the exchange have been a function of change in the price. Times when price is lower, you see higher volume. Definitely, the price discovery at the exchange plays some role in terms of more and more people coming on the exchange. If you want to share some insights on that, it would be very helpful.
See, price discovery is the key function of exchange. One of the USP of IEX has been that in the last 17 years, there has been no questions raised on the price discovery of IEX, which displays all market data on our website, which displays the price discovery curve, and no issue has been raised by anybody till so far because that shows the robustness of the technology platform and our price discovery process. Let's see what happens after the coupling. I will not like to comment anything on that at this stage.
Sure. One last question was on, you know, is the apart from IEX , since we have a very long history of operation, one competitor has a reasonable history of operations. The last one is very new. Will the other exchanges be able to handle this kind of volume if it could get divided among the exchanges? Any comments you would like to see?
I'm sure about one thing that before implementing the market coupling, regulatory definition is going to do their mock drill to check about the capability of the different exchanges, the IT infrastructure available, and the capability of the exchange, and then also do that mock trial with the data for traces. It will be seen what other efficiencies in the system and how to take care of that.
Okay, sure. Thank you.
Thank you.
Thank you. The next question is from the line of Prateek Jain from ICICI Prudential AMC Limited. Please go ahead.
Yes, sir. My question, am I audible?
Yes, yes.
Yeah, sir, my question is regarding other income. It was INR 120 crore in FY 2025, and this quarter is INR 42 crore, up 37%. Why is this large increase? Can you broadly explain the source of this income? What part of it comes from the interest on margin money and what part comes from the investments that belong to IEX?
The increase is mainly because of the one target maturity fund investments we had in our book, whereas because of the rate cut by the RBI during the first week of June, we had got a decent mark-to-market gain. We capitalized on that space, redeemed the funds, and we recognized that gain. That was the one reason.
That's amazing.
We had some investment in the NIFTY 50 index fund. Around a good amount of mark-to-market gain was during this quarter because the market made a good recovery from 22,000- 25,000. These two factors were the main reasons where we had a decent Jolie performance during this quarter.
Okay. Sir, regarding that term, let's say about FY 2025, if we have to look at the breakup regarding our own investments versus the interest income for margin money, what sort of proportion would that be?
It will be two-thirds from the own funds and around 2/3- 3/4, near about 75%, will be from the own fund, around 25% from the floating of the income.
Okay. Understood. Okay. Thank you, sir.
Thank you. Ladies and gentlemen, please limit to two questions per participant and please come back in the queue for the follow-up. Thank you. The next question is from the line of Devinkh Agarwal from IIFL Capital. Please go ahead.
Good afternoon, sir, and thank you for the opportunity. Firstly, sir, to start with, I just wanted to know your thoughts. Can this order be overturned by CERC? Is there any recourse that we have?
If CERC decides to do that, they can do it, definitely.
Sir, in terms of any legal opinions that you would have seeked over the last two days, is there some comfort that there is a case to challenge this?
We are evaluating this order. We haven't made any view on this at the moment.
Right, sir. In case assuming this goes through, one of the modes that we talked about was technology. When we talk about technology, is it the price discovery part in what we highlight, or is it the integration that we would have done over the years with the buyers and the sellers? That is like a mode for us.
It is, I think, a combination of everything.
The reason I ask is because you mentioned that there is a common software that will be developed to do this market coupling. In terms of price discovery, will we be taken care of by this common software?
Yes, yes, you are right.
What we are left with is the integration part that we have.
We have done so many things. Out of that, one thing has been taken out. The rest of the USP still remains. The rest of the activities which we have done here still remain with us. I'm sure we will be able to get the benefit of that.
Is this something that will be very difficult for the competition to replicate, in terms of, or they can do that over time, say, probably two, three quarters, or four quarters, and they'll be able to invest and replicate this, whatever technological advantage there?
There are 17 years to replicate this.
Although it's much more difficult than that. Right. Finally, one last one. If we were to assume that with market coupling, if we have to sustain a market share of, say, more than 40%, 50%, then what would be those key advantages that we would have to sustain that higher market share compared to the competition?
Devinkh, we are working on all these strategies, and we'll let you know in due course of time.
No worries, sir. Sure. Thank you so much.
I can assure you one thing, that we are not working on retaining 40%- 50% market share. We are working to reverse to retain the present market share.
Thank you. The next question is from the line of Lokesh Manik, Vallum Capital. Please go ahead.
Yes, hi. [Lokesh Manik] from the team. First, the issue where we ordered the spending made issue with 52 million units. Any spend for the spending could have been derived by coupling only the numbers to the numbers.
Which spending will you have made efficient by combining all the three exchanges?
Okay, number one of the reports that we got was an increase of 52 million units. It is not a savings. It is an overall volume tiered increase of 52 million units in a trade of 24 billion units. That is 24 billion units, 24,000 million units. There is an increase of 52 million units, which is insignificant. I don't think such numbers can be a reason for doing the market coupling.
Absolutely, sir.
My second question is you talked about, another that also talks about, you know, amendments and operational procedures to be implemented. Right? Any survival in any of these amendments, will there be a state involvement where involvement from states will be required from the 28 states?
Which is not clear. Can you repeat, please?
Will they have some form of approval from their end also will be required for these amendments to take place? Or they talked about some amendments will be added.
All these approvals will have been done by the Commission only. There is going to be a new regulation for the market coupling.
Right. Will the state commission be involved in this?
No, I don't think the state commission has no role to play in this.
Okay. Okay. That's the clarity for me. Thank you so much.
Thank you.
Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Good afternoon, sir, and thanks for the opportunity. My first question is, sir, have you heard anything on the coal exchange and EPR trading?
Coal exchange, we haven't heard anything about it, but I was reading in the newspaper that MMDR is going to the Parliament for some amendments. I don't know whether the coal controller of India will act as the coal regulator for the purpose of coal exchange, whether it is there or it is in that or not. We have not been able to find out that. If that is there, then that is definitely one positive step in the right direction for coal exchange.
Anything on the EPR side, sir?
Yeah, on the EPR side, I think CPCB is there to take a decision on that. They are awaiting their involvement.
Understood, sir. My second question is, what explains the sharp increase in the gas volume in the quarter, and the sustainability of this number in the coming quarters?
Yes, gas exchanges increased with respect to last year. Yes, there is a significant increase, but then the numbers are still small in comparison to our expectations. I'm sure in the coming quarters, we will see much better numbers.
How do you see this?
That's number six in price gas. By Reliance, it was sold for a three-month period in one lot. That also led to a significant increase in the volume.
How significant is the recent PNGRB regulation, which allows only two tariff zones compared to, I think, earlier the higher three or four tariff zones, if I'm wrong.
Yes.
Right, sir, for sure.
Definitely, these regulations are conducive for gas market development. Initially, there used to be four zones, then it became three, now it is two. In fact, you know, like in the power sector, we have injection and draw charges. In the gas sector also, invariably, it is only entry and exit tariffs. We are going towards that slowly. That's a good thing.
Understood, sir. Thank you, Devinthy. Thank you.
Thank you.
Thank you. The next question is from the line of Rishabh Shah from BugleRock PMS. Please go ahead.
Is everyone available?
Yeah.
Sir, I have one question. Other exchanges, you have other kinds of systems or competitors. Both systems like this have a lot of things. As a competitor system, our system won't be the same. If a user is comfortable with the internet platform, what initiative would he have to shift to a new platform?
Your question is not clear. I think what you are talking about is that if a competitor's platform is not similar to ours, what benefit do you have in shifting?
Yes, yes, yes.
A regulator will have to decide about the common platform, the common software, and also the IT infrastructure all across all three exchanges compatible to the requirement of the system. These kinds of things can be done only after that.
Can we assume that if these things are not compatible, then this market coupling might get removed again if the systems of the competitors are not compatible?
Actually, these are some of the requirements for implementing market coupling. I'm sure the regulator will implement market coupling after fulfilling all the requirements.
Okay.
Fine, thank you, sir.
Thank you. The next question is from the line of Ketan Jain from Avendus Sp ark. Please go ahead.
Thank you. Sir, my first question is on sticky competition. What steps, apart from reduction in transaction fees, can be competition to attract customers? Is it something like reducing subsistency to a market requirement? What stops them to invest in better technology? Please do. We are a little unclear on this.
Number one, if you see, the surging order is for coupling of day-ahead markets. Easy DAM is constitutionally about 35% of our volume.
Mr.
I'm just going to come to the line.
Yeah, is it better?
Yeah, yeah. DAM markets constitute only about 35%- 40% of our total volume. We still have almost about 60%- 65% volume coming from the other products. We will continue to maintain that technology platform and continue to do operation of that. Even in case of DAM market also, except for the price discovery, there are other parts of the technology platform, technology services, customer services, market development activities, which will continue to do that. I'm sure that all will basically ensure that we retain the leadership position.
Understood, sir. Sir, I wanted to understand one more thing. In terms of, as a customer, if I'm a customer and if I want to move my accounts from IEX to some other competition, will I have to shut down my account? Will the company have to pay the margin money back to them?
Yeah, margin money is a customer's money. They can take it back anytime.
Right. Understood.
If they are doing trade here, they will have to ensure that margin money is available.
Understood. What about the, this is an understanding question. If I'm a customer and only if the day-ahead market is coupled and the Real-Time Market is not coupled, for me, it will become an inconvenience to go to some other exchange just for the day-ahead market. For the Real-Time Market, the liquidity will be with IEX. It will continue to be with IEX. Is that a fair assumption?
I think you can yourself analyze this situation and take a call on that. RTM, you are participating on the exchange IEX platform on round-the-clock, which is keeping margin for that. Then you are subsequently participating in other sectors.
Understood.
Other exchanges are trying to bring additional margin there.
Correct.
You have to take a call on that.
Understood. Correct. Who will be doing?
Huh?
Correct. Understood, sir. Yeah, this is a fair point. Who will be doing the settlement and clearing process?
The effective exchanges.
The effective exchanges, whenever it's their turn of round-robin.
For the bids received by them, whatever bids are settled, cleared for those bids, the effective exchanges will clear through the financial settlement.
That's correct. Even in the decoupling, even for the day-ahead market segment.
Yes, yes.
Understood. Okay. As you said, there should be a new common platform which needs to be developed, right? Install it across all the exchanges for coupling?
Yes, that is my understanding.
Understood.
As quickly as we can.
Who will be developing this? The regulator will nominate someone?
These are all details to be worked out.
Understood. Understood. Okay, sir. That's it for me. I'll come back to it.
Thank you. The next question is from the line of Subhadip Mitra from Nuvama. Please go ahead.
Definitely, sir, and thank you for the opportunity. Just one point of clarity. I think this is a point that you've already talked about before. When we are looking at market coupling and each of the exchanges getting the opportunity to be the market coupler for price determination on a round-robin basis, on a particular day, let's say exchange A is doing the price determination, it doesn't mean that the volume has to automatically flow through that exchange, right? It can flow through any of the other exchanges depending on where the bids are coming. Is that the right understanding?
Yes, volumes will be flowing through the exchanges from which the bids are coming.
Understood. Understood. Secondly, a broader question on M BED versus SCED. My understanding was that with SCED already in a pilot phase and some thoughts of extending these beyond central government plans to even state-owned GENCOs, do you see MBED really having an impact since you already have an alternate mechanism to SCED? Or do you think there is space for both?
Yeah, SCED is basically a subset of MBED. If MBED is not being implemented, maybe to some extent, SCED is serving the purpose. That is an optimization between the central generating systems. MBED was for central generating systems, state generating systems, ICCs, everybody is taken together.
Correct. If SCED, I mean, hypothetically, if we assume that SCED gets extended to sensors plus state-generating stations and that is anywhere running on the Grid India platform, then MBED, even if it comes, may not have much of an impact.
Sure. See, SCED is basically an operator between the central generating systems only. In the same SCED, if you bring the state-generating systems also and ICPs, then it will be as good as MBEDs.
Correct. Would exchanges still have a role to play there since that is already running on a pilot through a separate platform?
That is a different exercise. That's basically just before the actual scheduling actually starts, they are doing the optimization study. Bringing state generation to the central schedule is a difficult process. That is why an initiative will be taken to do intra-state schedule within the state. Each of the state schedules is being done to achieve some efficiency there.
Understood. Understood.
I think that's it.
Okay, sir.
I think that's it. Maybe during your next visit, we can discuss in detail.
Certainly, sir. Thanks a lot. Thank you so much.
Thank you. The next question is from the line of Abhishek Nigam from Motilal Oswal. Please go ahead.
Yeah, thank you for the opportunity. Sir, just a sort of short question. I'm not asking you for, you know, your response to this, but theoretically, what are the options available post the CERC order? Can you, can someone go to an appellate tribunal? Can you, you know, appeal in a court of law? Again, you know, just to reiterate, not asking you for your legal options right now. Just.
There are many options available. One is we go ahead with this. Second is we go to CERC for review. Third is we go to FTL. There are many options available. I told you at the beginning of this conference that we are evaluating this order, and you have to take care of your own.
Fair enough. I totally understand it. It's very, very early. The second question is that, you know, the order says that the exchanges have to basically cooperate with the market coupling operator. It's still very early days. I know this is still being sort of worked out and you are going to look for clarifications. Is there any proprietary stuff, any software which, you know, they might expect or they might need to be able to implement this? Do you think you have that clarity on that?
I'm not clear about your question. You said that what are the.
When the order says that the exchange has to cooperate with the market coupling operator, is it just data or does it include some algorithm, something that is proprietary to you?
I don't find such mention in the order. I can't tell you where it is.
Okay. Maybe I'll just, you know, connect with Aparna later on.
The last paragraph, paragraph nine, is the commission hereby directing all power exchanges to share the necessary data and other information as required by the staff of the commission and Grid India to analyze various operational and procedural aspects for implementation of market coupling in them.
Yeah, I see. That's what I was referring to.
No, no. This does not talk about technology or any such thing.
Yes, I see. That was my question. It only talks about data in there, right? That's fine.
Okay.
Okay. Perfect. That clears it. This last question, you know, post this disruption in one major segment, is there a sort of a rethink or a pause in terms of strategy with respect to new product development, new segments which you are trying to enter? Because, you know, if something similar happens in one of those segments as well, what are the thoughts for there?
Product development is a continuous process.
Sure.
Five years back, we had only one product-tailored market and government market. Nowadays, we have so many products available. In the future also, it will be a continuous process. We have already five petitions for the green Real-Time Market and also a petition for big power. 11 months contract is already with CERC. It will be a continuous process. In due course of time, as and when we find that there is a need of a new product in the market, we will take up sales.
Perfect, sir. Thank you so much. Thank you for giving me a chance here.
Thank you. I think it's already about 3:30 P.M. Can we have one last question or two last questions?
Okay. The next question is from the line of Nikhil Abhyankar from UTI Mutual Funds. Please go ahead.
Yes, sir. Just one question from my side. Can you just share the terms of revenue share agreement that you have with NSE and BSE for the power derivatives?
I don't think there is a need to share that. We have an agreement with MCX, so that it is on site.
What portion of the power derivatives revenue itself goes to us?
I think these things are necessary to be discussed here.
Got it. Thank you.
We are not paying anything to them. That is for sure. I think if there are no more questions, can we close the conference?
Thank you. I now hand over the conference to management for closing the matter.
Thank you, friends. I would like to thank each one of you for being part of today's call. Throughout this quarter, we witnessed efforts from the government and regulators to establish a favorable policy and regulatory climate to develop the energy sector. We at IEX remain committed to contribute to the development of a sustainable and energy-efficient future for India. Have a wonderful evening. Thank you once again.
Thank you. On behalf of Axis Capital, that concludes this conference. Thank you for joining us, and you may now disconnect.