Ladies and gentlemen, good day and welcome to Indian Energy Exchange Q2 FY 2027 Earnings Conference Call hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rohan Gheewala from Axis Capital. Please go ahead.
Thank you. Good afternoon, ladies and gentlemen. On behalf of Axis Capital, I am pleased to welcome you all to the IEX Q2 FY 2027 Earnings Conference Call. We have with us the management team of IEX, which is represented by Mr. Rohit Bajaj, Joint Managing Director, Mr. Satyanarayan Goel, Chairman and Managing Director, Mr. Vineet Harlalka, Chief Financial Officer, Mr. Amit Kumar, Head of Operations, New Product Initiatives, and Exchange Technology, and Ms. Aparna Garg, Head 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.
Thank you. Good afternoon, friends. I welcome you all to the IEX Earning Call for Q2 FY 2027. 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, amid global uncertainty and inflationary pressures driven by oil supply volatility, India continues to remain the fastest-growing major economy in the world, having recorded a strong GDP growth of 7.8% in Q1 FY 2027. Reinforcing this outlook, the IMF recently revised its forecast upwards and projects India GDP to grow by 7% in each of the next two years. This growth trajectory is powered by strong domestic demand, robust services activity, and favorable demographic trends.
Notably, this performance comes despite severe El Niño conditions, which led to the fourth-lowest performing monsoon season this century, with rainfall at just 87% of the long period average. Looking at the bigger picture, India is steadily progressing toward a INR 5 trillion economy by FY 2030, driven by reforms like GST rationalization, new labor codes, and FTAs with the U.K., Switzerland, New Zealand, and the forthcoming one with EU and some other countries. Together, they are advancing the vision of a Viksit Bharat by 2047. This growth story will be fueled by electricity at its core. The power sector witnessed sustained demand growth during the first half of the year, supported by strong industrial activity and higher irrigation demand amid the weak monsoon. In the first half of FY 2027, power demand grew 10.2% YoY to touch 897 billion units.
Elevated temperatures due to El Niño and deficient monsoon rainfall drove Q2 electricity demand to 502 billion units, marking a record 11.5% year-on-year increase. While peak demand during the summer reached 271 gigawatt, it remained elevated at 269 gigawatt in September. The demand and supply scenario remained volatile during the quarter. A weak monsoon increased buy bids in IEX Day-Ahead Market by nearly 120% year-on-year in Q2, pushing up average DAM prices nearly 46% year-on-year to INR 5.72 per unit, and average RTM price higher by 49% year-on-year to INR 5.24 per unit. With prices touching INR 20 per unit in certain time blocks during the quarter, the high-priced Day-Ahead Market, the HP-DAM, played a critical role by enabling unmet demand bids to transition into the high-price segment, ensuring supply for buyers with urgent power requirements.
However, cyclones and unseasonal rains during the later part of the quarter moderated demand in the central regions, providing ample supply liquidity and driving RTM prices to near zero in multiple time blocks on a few days. In the first half of fiscal, prices during solar hour touched an average of INR 2.3 per unit, pushing up arbitrage opportunity to over INR 6.5 per unit for both two-hour, two cycles per day, and four-hour, one cycle per day Battery Energy Storage Systems, and providing further opportunity for addition of this capacity. On the fuel side, domestic coal production was largely flat at 445 million ton in H1 FY 2027 compared with H1 FY 2026. Summer demand strained plant inventories, and weather disruption tightened availability further. As of 22nd October 2026, coal inventory stood at nearly eight days, with stock at about 100 plants at a critical three days level.
The Ministry of Power has been closely monitoring coal stocks and has taken various measures to improve coal availability, and some of these things can, measures can be seen on the ground. Further, MoP has invoked Section 11 of the Electricity Act to direct over 100 captive coal-fired plants as well as Coastal Gujarat Power Limited, CGPL imported coal-based plant to maximize generation till 31st December 2026. Let us now talk about few important regulatory updates and policy initiatives during the quarter. Earlier this May, CERC issued a discussion paper on strengthening and scheduling timelines for Real Time Market. The paper proposes reduction of RTM auction window from 15 minutes to five minutes, and thereby reducing gate closure time from 75 minutes to 50 minutes. The objective is to enable better forecasting, more efficient management of renewables, and enhance liquidity on the exchange platform.
The same has now been proposed in draft grid code IEGC, and public comments on the proposal were invited and closed last week. The CERC issued amendments to the Sharing of Inter-State Transmission Charges and Losses Regulations, 2020, providing ISTS charges waiver for up to 25 years from Battery Energy Storage Systems integrated with renewable or hybrid generating stations. This should expectedly reduce the cost of power trading for BESS players and increase liquidity on exchanges. In other developments, CERC has identified the Green Day-Ahead Market as a source of green power for energy storage systems such as BESS and PSP to procure power and meet eligibility criteria to qualify as green storage. This classification should increase trading in GDAM segment at exchanges. The CEA made draft amendment to Technical Standards for Construction of Electric Plants and Electric Lines, 2nd Amendment, Regulations, 2026.
The draft proposes that solar and onshore wind projects commissioned after July 1, 2027, would have to be equipped with co-located energy storage system with a minimum two-hour storage duration and capacity equivalent to at least 10% of the plant installed capacity. It further proposes an increase in storage duration for project commissioned after July 1, 2029, and up to July 30, 2031. These solar and onshore wind projects would be required to install co-located ESS with a minimum four-hour storage duration, with storage capacity equal to at least 10% of the plant installed capacity. These measures would help in grid stability going forward as countrywide renewable capacity increases and provide liquidity on the exchanges.
With regards to the carbon market wherein carbon credit certificates are to be traded on power exchanges, Bureau of Energy Efficiency, BEE, in consultation with Grid India, has issued draft procedures for trading of these certificates under the compliance mechanism. In conjunction, IEX has filed a petition with the CERC for approval of carbon credit certificate trading on the exchanges. On market coupling in July 2025, CERC issued an order proposing implementation of market coupling in the Day-Ahead Market, pursuant to which IEX filed an appeal before APTEL and subsequently in the Supreme Court. Both forums observed that market coupling cannot be implemented by this order, and it can only be implemented after the regulations are issued. Hence, IEX is not an aggrieved party yet, and they do not wish to interfere at this stage.
If IEX is aggrieved by the final regulation, they can approach the appropriate forum, including the grounds raised in the appeal made. Meanwhile, CERC issued draft regulation for market coupling in the month of April and proposed Grid India as the market coupling operator. Submission of comments by stakeholders and public hearing on draft regulation was completed in the month of June. There has been no further development on this during this particular quarter. CERC in its order of July 2025 had also mentioned that in case of real-time market, since the timelines are very tight for bidding and the auction process, this would be considered subsequently.
In light of the CERC discussion paper for shortening the scheduling in real-time market, that is reducing the gate closure time from 75 to 50 minutes, where RTM bidding will be reduced from 15 to five minutes, coupling is likely to become more challenging. Further, over the last three years, we have undertaken several initiatives to strengthen our customer relationships and technology capabilities, including extensive customer interactions and feedback, providing API-based bidding tools, back-office integration through APIs, data analytics, enhanced web portal, customer-centric digital solutions, and reinforced cybersecurity safeguards. With our customer-centric initiative, track record of trust, and deep customer engagement, we shall be able to retain and strengthen our market position post-coupling. Moving on to IEX performance in this quarter. During Q2 FY 2027, IEX recorded electricity trading volume of 39.7 billion units, a year-on-year growth of 12.7%.
For H1 FY 2027, electricity traded volume reached 77 billion units, a growth of 14.2% over the first half of FY 2026. Revenue for the company grew by 10.7% year-on-year, increasing from INR 183.3 crore in Q2 FY 2026 to INR 203 crore in Q2 FY 2027. Profit after tax increased by 12.9%, rising from INR 123 crore in Q2 FY 2026 to INR 139 crore in Q2 FY 2027. In Q2 FY 2027, 15.3 lakh renewable energy certificates were traded, considerably lower than 44 lakh certificates traded over the same quarter in FY 2026. The RTM segment continued to demonstrate strong growth with nearly 42% share in electricity volume at IEX, surpassing the share of the DAM segment for the second quarter in succession. The segment witnessed the highest ever single-day volume of 315 million units during the month of September.
For Q2 FY 2027, RTM volumes at nearly 16.5 billion units were higher by 10.5% on year-on-year basis, highlighting the segment's critical role in helping DISCOMs and open access consumers efficiently manage their short-term requirements. RTM's ability to offer flexibility and immediate responsiveness underlines the opportunity to efficiently integrate renewables with the grid and weather-related volatilities. With regard to our product pipeline, we continue to await approval from the CERC on our petitions to extend the Term-Ahead Market contract from three months to 11 months, to introduce the Green RTM contract, and third, with regard to introduction of Peak DAM and Peak RTM segments. Moving on to IGX numbers.
IGX traded gas volumes of 42 million MMBtu in Q2 FY 2027, a growth of 160% over Q2 FY 2026, led by volumes from domestic gas producers and heightened power demand being met by gas power plants during the month of August and September. In Q2 FY 2027, nearly 30% of the traded gas volumes were from the power sector. For the first half of the year, traded gas volume reached around 70 million MMBtu, higher by nearly 71% over H1 FY 2026. For Q2 FY 2027, IGX recorded a profit after tax of INR 23.4 crore, which was higher by 144% compared with INR 9.6 crore in Q2 FY 2026. PAT in H1 FY 2027 stood at INR 39.7 crore, an increase of 67.4% over H1 FY 2026. As you may be aware, we had filed a DRHP draft red herring prospectus for an IPO of IGX earlier in July this financial year.
As per PNGRB regulations, Petroleum and Natural Gas Regulatory Board, we have to lower our existing holding from 47.3% to 25% by end of December 2026, and the IPO process remains on track. Our other diversification initiatives are also gradually gathering momentum. For Q2 FY 2027, ICX Private Limited issued nearly 52 lakh I-RECs, a growth of 38.4% year-on-year. Issuance in the first half of FY 2027 reached 94 lakh, a growth of 15% over H1 FY 2026. Revenue for ICX in Q2 FY 2027 stood at INR 2.3 crore, higher by 20.8% on year-on-year basis. I-REC is a globally recognized digital certificate that serves as a transferable proof of generation of one megawatt hour of energy from renewable sources. With regards to our initiative to build a coal exchange in India, IEX has incorporated Indian Coal Exchange Limited as a wholly owned subsidiary for this purpose.
Recently, in September, Indian Coal Exchange Limited applied for a license with Coal Controller Organisation, CCO, the regulatory body for coal exchanges. Indian Coal Exchange aims to be physically delivery-based coal trading exchange, providing an organized, transparent, and technology-enabled marketplace for coal trading in accordance with the Coal Exchange Rules 2026. The exchange will facilitate trade sales at designated delivery points, enabling efficient price discovery and wider market access. Further in line with the government vision of bringing transparency in trades of all commodities, Ministry of Mines has also notified final regulations for a mineral exchange. This development is being explored and should provide us with another diversification opportunity. With the power consumption forecast to hit nearly 2,700 billion units going forward, with peak demand of 388 gigawatt by 2032, we believe power demand growth will continue to drive exchange volume growth in the coming few years.
In response to this expected demand growth, the MoP has been regularly monitoring the roadmap of thermal capacity addition, which has now been revised from an earlier 80 gigawatt by 2032 to 115 gigawatt by 2035. In addition, the government and regulators continue to take policy measure to ease supply side liquidity to rationalize power prices on exchange. India power sector continues to experience fast-paced transition. The government focus on green hydrogen, data centers, AI economy, electric vehicles, pump storage, battery energy storage, all this will lead to innovation of new products and market segment on the exchanges.
Battery energy storage systems and FDRE round-the-clock tenders are gaining traction. To further deepen the green markets, we have continued to advocate market-based options like CfDs, Virtual PPAs, and Merchant Models for RE capacity addition. Going forward, with large-scale rooftop solar, we see emergence of local energy markets and ecosystem where exchanges will play a central role. These developments are posed to become key enablers in expanding and deepening the country's power market to support a successful energy transition. As emphasized by honorable Prime Minister, India aims to achieve energy independence by year 2047. As India marches towards its net zero target of 2070, power exchanges will have a significant role to play in shaping the country's energy ecosystem. Thank you, and now we can move for question and answers.
Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bharani V from Avendus. Please go ahead.
Yeah. Am I audible?
Yes, you are audible.
Yeah, yeah. Good afternoon, sir. This is Bharani. My first question is on the draft regulations by CERC. In your opinion, why do you think there is no decision yet or any movement there so far? And when do you think there will be final regulations that will be coming out on this one?
We are in no hurry. We are waiting. We don't know when it will come.
Okay. Related question to that is, for the stakeholder comments that was sought and in which Grid India had given their comments, in your opinion, their readiness and their ability to implement the way CERC is asking them to implement by being the sole market coupling operator, all those things, is it feasible? Are they ready? Will there be any delays in implementing because Grid India seems not to be ready to implement it in the way CERC wants them to do?
See, first of all, the regulations needs to be notified. Depending on what is notified in the regulations, thereafter the necessary preparation will start. This is a major change, so I think all this will require a lot of preparation, lot of activities to be done, software to be developed, hardware to be ensured uniformity in all three exchanges, and settlement system to be developed, mock trials to be done. All these things will take time. It is difficult to say any definite timeline about it, but definitely not in this calendar year. My own estimate is that it might take another 1.5- 2 years also, but it all depends on after the regulations, how is the regulations, and in what way they want to implement it.
Okay, understood. My second question is on the quarter that has gone by. We've seen the country's base power demand growth at around 13% or electricity volumes have also grown at the same rate. Here we have seen kind of a slow or sluggish growth in the DAM volumes, while TAM volumes and real-time product volumes have been much higher. So, in your opinion, what is driving this particular behavior of buyers and sellers in this quarter where TAM volumes are growing more, DAM volumes are sluggish, and how do you think this will play out for the remaining part of the year?
See, whenever demand is higher than the supply, there is shortage and there is increase in the price. Availability of power, particularly during the evening hours, is slightly uncertain. That is why many of the DISCOMs, then they get into the bilateral contracts, and that leads to shifting of volume from the DAM to the TAM and to bilateral contracts. This phenomena typically happens during three, four months in a year, during the monsoon season. If there is a good monsoon, like last year we had a good monsoon, so bilateral contracts were much lower. This year, right at the beginning of April, May, it was clear that El Niño impact is going to happen and we are going to have less rains. So, right from the month of July, August, we started seeing these bilateral contracts. But now, end of October, and the prices have again corrected.
They are down to almost about INR 4 per unit, and there is enough availability of power in both DAM and RTM. Volumes have started increasing in DAM and RTM now.
Understood. Related question to that, of the TAM volumes, is it possible to give split of how much is intraday, how much is one month, or how much is three-month kind of volume?
I think Rohit.
See, in TAM, majority of the volume is traded under daily and monthly contracts. DAC and ITD is also there, which is about 20%-25% of the total volume which is there in bilateral segment. So there is monthly, weekly contracts which are there, which is about 70% of the total thing. Yeah, which is about 70%, little over 70%. And then there are volumes which are in DAC and ITD, the intraday thing, which is less than 30%.
Sure. One more question, if I may, on the RECs. Here we are seeing a decline in volumes because of the recent buyout regulations. First question there is, of the REC volumes we have seen in FY 2026, that is last year, how much was contributed by the designated consumers now who need not come and buy in the market and who are buying directly?
Almost 80% of the volume was contributed by the bigger ones, which are major DISCOMs, those who are buying, and some of the big C&I consumers, those who are buying. Now, with the new policy being in place, it is impacting the volume, and precisely for this reason, we have seen the volume going down drastically. Many of these buyers are sitting on the fences. They are watching the market. They are observing the prices. Suppose there is further correction in the prices, we expect some of these to come on the market and start buying again.
Understood. The answer is 80% of the FY 2026 volumes contributed by designated consumers-
Yeah.
who will probably not be buying in the market right now. Okay.
I won't say they are not being buying, but yes, the buying has reduced a bit, reduced a lot. Some of them are sitting and waiting for the right prices. If there is correction in prices by another 10%-15%, possibly some of this will start to buy.
Sure. One last question. What is the status of the appeal or case which is sub judice in Supreme Court that we have filed for?
Mr. Rohit, in his opening address, he mentioned that Supreme Court has already said that this is premature now because coupling cannot be implemented by this order of CERC. Coupling can be implemented only by the regulations. IEX will be aggrieved only as and when the regulations are issued. They have said that, and if you are not satisfied with the regulations, you can approach the appropriate authority against the regulations, including all the grounds which were raised in the appeal and SLP there.
Understood. Thank you so much.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. Should you have follow-up questions, please rejoin the queue. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Good afternoon. My first question is that, as FDRE and storage push continues, energy transition and new market models have contributed how much to your electricity traded volumes in Q2 FY 2027, say, versus Q2 FY 2026, if you could give us some sense? Basically, the idea is to understand how will growth in volume linked to new market models evolve over the next two years, and how does this impact IEX? That's the first question.
See, if you look at the increase in volume in the RTM market, it is continuing from the last two, three years at a very high rate. This year also, our RTM volume have increased significantly. In the RTM segment, quite a good part of it is from the renewable generators, renewable power supply. It is very difficult to segregate it that whether it is from the FDRE contracts or from the solar or wind contracts. But definitely, good part of the volume growth is happening because of the renewables. As the energy transition takes place, I'm sure exchanges will have a very important role to play because we have seen this whenever there is a variability in the power generation. Exchanges play a very important role.
It has happened in other countries, and in India also, we are sure, will have an important role to play, and the volumes will keep on increasing.
I will add something here. See, on the basis of our discussions with various developers, we have observed that when you are signing PPA for a FDRE contract, you have to create huge additional capacity. In some of the cases, this is 4x, 5x of the energy that you want to deliver as per the profile given in the FDRE contract. There is lot of excess capacity is created there, and this capacity is quite volatile. It is not a fixed quantum which is there, so there is no way you can enter into another PPA to sell this contract. What you do is, wherever there is surplus generation, you bring that on the exchange platform.
Similarly, on the BESS side, if you see, out of the capacity which has been commissioned till now, about four gigawatt of capacity which is there in the country, majority of that capacity is created under merchant route. Now, this is very different from what we have seen in case of thermal capacity addition or for that matter, renewable capacity addition. People are finding, developers are seeing value in the markets. They are creating this capacity and then bringing it on exchange and trying to take BESS arbitrage which is available.
Yes. The exchanges can accommodate how much of this merchant trade? Will the arbitrage weaken, or will it remain strong for the next two, three years?
See, the gap is huge when you compare daytime prices and the evening prices. There is huge gap and shortage that we have seen particularly this year has been very high. Deficit has been very high. So lot of room available in the exchanges to absorb the arbitrage play which is there for BESS plants. One more thing is, today FDRE has become possible or merchant BESS has become possible because there are liquid markets already in place. If you don't have this market available, you cannot think of having FDRE contract or merchant BESS contracts.
Sure. My second question is on IGX, ICX. IGX, due to performance has been quite good. In fact, more than half the profit of FY 2026 in just one quarter. What is the outlook on growth in volume for FY 2027, 2028, 2029? Similarly for ICX, you had a profit of INR 4.7 crore in FY 2026. What is the profit in first half of this year? What is the outlook?
Our exchange, IEX, we have been growing at a rate of almost about 14%, 15%, and I am sure this year we should achieve a growth rate of 15%. IGX also has done as far as the volumes are concerned. I think the volume growth is almost about 70% in the first half of the year, and the demand from the power sector was quite high. In the second half also, we expect a reasonably good volume growth. Overall, I think IGX should be able to achieve 40%, 50% of volume growth on year-on-year basis. ICX, there we are only doing the registry of I-RECs, and there I think a growth of almost about 20%, 25% in the revenue should happen.
Is there any profit number for ICX for first half of the year?
ICX, yes.
For the ICX first half year, profit is INR 2.7 crore.
Okay. Thank you, and wish you all the best.
Thank you. The next question is from the line of Saksham Tyagi from Desvelado Advisory. Please go ahead.
Hi, am I audible?
Yeah, we can hear you.
Okay. Thanks for the opportunity, sir. My first question is that, since we are expecting the peak demand of 388 gigawatt by 2032, right? How are we planning to fulfill that demand? How are we approaching towards that?
There is lot of capacity addition which is planned, which is in the pipeline, and I am sure we should be able to meet that because government is already taking action on that. All this planning work is going on. Lot of, I think, almost about 80 gigawatt of thermal capacity is under construction. Similarly, for battery, that is also under the viability gap funding scheme, BESS of 43 gigawatt is already awarded. And then many of the states have also awarded battery energy storage systems. Under the merchant route also, many of the IPPs are awarding it. So we expect by 2032, battery itself will be more than 100 gigawatt.
Okay.
All these things should be able to meet the demand.
Okay, sir. Understood. My second question is on the AI adoption. As you mentioned in the investor presentation, almost everything related to AI adoption is in progress currently. I just wanted to get an insight on the progress so far. Where have we reached so far in building these AI bidding assistants, or you can say AI chatbots, et cetera? Where do we currently stand, and also what's going to be the impact once this AI adoption has been completed?
Yeah. This is one area where we, in fact, we have been working for a couple of years now. Certain things have been delivered and certain things are in the pipeline. Our wish list, the things which we are working upon is we are creating AI bidding assistant for DISCOMs. The work is under progress, where there would be agent sort of a thing which will help them in placing their bid, and it would be seamlessly connected with our systems. We already have APIs in place, and with the help of APIs and on the other end having assistants, we would be able to get them on board very smoothly. Similarly, there are auto-bidder solutions which are being created for customers, including industries users, where they can take advantage of these things and integrate with us on a seamless basis.
Another important thing here is data has a big role, and through our web, the portal which is there, already many of these participants, they are able to see that data, and they can use this data in taking decisions with regard to putting price on the bids. So they are already using it, and there is no end to the innovation on the data side. We are constantly working on it and ensuring that more and more analytics can be shared with the customers, and then they should be able to take advantage of these things. So, the list is long, but these are some of the points which will give you some idea on which direction we are working on the AI as well as on the data side.
Okay, sir. Understood. Thank you very much.
Thank you. The next question is from the line of Harsh. Please go ahead.
Hello, am I audible?
Yeah, yeah. Heard him clear.
Yeah. I just wanted to know, this quarter we saw a lot of growth in our DAM and Term-Ahead Market. I just wanted to know what can that be attributed to?
DAC and ITD volume growth happens basically in the second quarter. Because second quarter this year, the monsoon was weak, so there was a lot of uncertainty and people wanted to secure power, so they bought that power under the ITD and DAC.
Okay. In terms of the different markets that we have, what is the scope of one market cannibalizing volumes from other markets? Let's say a coupling happens in the Day-Ahead Market, then what is the scope of some of that volume shifting to the Real-Time Market instead of going to other exchanges maybe?
See, if you see trend of the last year, we introduced Real-Time Market in June 2020. If you see growth of volume in the Real-Time Market and growth of volume in the RTM market, RTM market volume growth is hardly on CAGR basis about 4%, 5%, 2% it is, in fact.
Day-Ahead Market.
In the RTM market, the volume growth is almost about 30%-35% on CAGR basis. RTM market volumes are growing at a significant rate, and with high renewable, I am very sure that RTM market volume will further continue to increase. RTM is now, as of now, in the first seven months of the year, RTM volume is far more than the Day-Ahead Market volume. I am sure in future also. Today, the RTM volume is about 41% of the total volume, and DAM is only 35% of the total volume.
My question was more about, is this volume gain happening organically or there is some component of RTM markets eating away some of Day-Ahead Market volume?
Yes, some shifting is definitely happening because before 2020, the growth was in the Day-Ahead Market only. Now the growth is happening in the RTM market because many of the buyers are shifting to the RTM market because RTM market prices are always lower than the Day-Ahead Market price. In the RTM market, the sellers are desperate sellers, so the prices are lower, and then you can do a better estimate of your demand and meet the demand. The trend is that RTM market.
If there was to be coupling in the Day-Ahead Market, hypothetically, then is there a chance of buyers simply shifting from Day-Ahead Market to RTM on our exchange instead of going to other exchange? What are the chances of something like that happening?
See, I think in the earlier call also, we have explained that in the last 2-3 years, we have done a lot of activities in the company to ensure to retain the buyers with the exchange. We have done a lot of use of technology also, we have done a lot many developments, customer interactions, product development, API integration. With all that, I am sure that we do not apprehend any shifting of buyers from the IEX to the other exchanges. Shifting from DAM to RTM, this is all basically based on the price and availability of power. I do not think coupling has any role to play in this. But one thing I can tell you, in time to come, RTM will definitely have a better role to play, and the volume growth will be in RTM will be more.
Coupling in RTM is definitely going to be challenging. RTM, earlier also when we had 15 minutes of bidding time and 15 minutes of market clearing time, the timelines were tight. Now, as per CERC staff paper, if the bidding time is reduced to 5 minutes and clearing time to 10 minutes from 1st of April, I think the timelines will be further tight.
Okay. Understood. Thank you.
Thank you. The next question is from the line of Akshat Shetty, an individual investor. Please go ahead.
Good afternoon, sir. Thank you for taking my question. My first question is related to settlement funds and treasury income. I see that as of 30th September 2026, our standalone investments stood at around INR 2,170 crores compared with the shareholder equity of approximately INR 1,388 crores. The current other financial liabilities were around INR 1,051 crores, largely comprising settlement obligation and members' margin deposit. With inter-exchange settlement under market coupling and the proposed separation of clearing function also being discussed, could you clarify how much of this investment corpus and other income is linked to this member fund? Might this development affect the treasury investment and interest income going forward?
Mr. Vineet Harlalka will respond to this question, but one clarification I would like to give you. There is no proposal of separating clearing function from the exchange. The clearing function will continue, clearing and settlement will continue to happen the way it was happening. Okay? Vineet.
Look, there are the two components, as you had said, one is the shareholders fund and one is the float from the trading margin and the settlement obligation. The treasury returns is the composition of all these things. Second, how the money market is behaving, what is the interest rate cycles around the market sentiment. To predict how much these numbers will be there will be quite difficult. But looking at the way the volumes and all the things are going, and presently it is in the range of 15%-18%, we think the treasury income should be remaining in that range. We are hopeful, and we try to get the maximized value of the investment. Regarding how much this float amount will remain, it will totally depending, because the float we don't control, it totally is the market role.
What is the price trading, the volumes, and all. It will depending upon that structure only. Returns will be mainly market-driven because we invest in the market securities and the money market components. That is how the market behave, and we'll try to get value out of it.
Okay, fine. Got it. I have another question related to DISCOMs. I see that DISCOMs account for around 80%-85% of purchases on IEX. And market coupling, could you share how much of your large DISCOM buyers or the trading member bidding on their behalf are already registered or active on other power exchanges? Also, in the Term-Ahead Market where IEX market share is lower, what primary drivers buyer choice on exchange? I mean, liquidity, transaction fees, or established relationship?
So, you are right in saying so. DISCOMs, distribution utilities are the major buyers. They are contributing to about 80% of the total volumes on the buy side that is being done. Majority of them are participating directly. Except for few DISCOMs, all of them are our members, and they themselves participate. They don't participate through any of the trader member as such. So, if you also wanted to know about who are the big participants?
Yes. Yeah.
It changes with the season. In Q2 particularly, where the demand in the southern season, the southern region was very high, all the southern region participants were buying very heavily. Then all the big states like Maharashtra, Gujarat, U.P., Rajasthan, they are also regular buyers. Top five, it keeps on changing depending on the season, depending on the month, depending on their requirement. But generally, top 10 are the top big states which are there in the country. They are generally the biggest buyer. Second thing you wanted. Yeah.
Yeah. Yeah, sir. Please continue. Yes. Yeah.
Okay. Second thing you wanted to know about TAM. TAM, our market share is lower. It hovers around 35% and it has been there for many years. The point there is, it is not dependent on the DISCOMs as such. It is being done by, generally the distribution companies, they have tendency to put something everywhere in all the exchanges. As you know, this is not a very highly liquid market. Wherever there is a participation, it gets through. That is the reason why it is spread across all the exchanges. Yeah.
In fact, Day-Ahead Market and Real-Time Market are our flagship products. We are concentrating more on these products than in the TAM market.
Okay. Got it. Okay. Okay, sir. Thank you for answering my questions. Thank you.
Thank you. The next question is from the line of Abhishek Sinha from Bodh Capital. Please go ahead.
Yeah. I hope I am audible.
Yeah.
My question is about capital allocation. In January 2023, the board bought back shares in the open market. I think the price was close to around INR 200, and the profit, FY 2023 profit itself was around INR 300 crores. This year, we should be doing double the profit mostly, close to that. The stock is, the price is nearly half. I wanted to understand the direction that the board is taking in terms of distributing the cash, because I am assuming removing the members' margin money, also we should have around INR 1,000 plus odd crores of cash in hand. I would like some input on that.
The money we had been regularly paying around 60%-65% of our profits as a dividend, and the float money definitely is something which is regulated as per the rules and bylaws and the CERC regulations. It cannot be done. Regarding the market side, the board always look what is the BESS value we can create for our stakeholders, and that is how we are distributing 65% of the profit. Going forward also, we look into it. Regarding the surplus cash, we are looking and exploring all the options, as in the AGM speech also, the chairman had said that. We look at the BESS possible options to create value for the stakeholders.
Buyback, yes, the price is low, and we will definitely consider this option also. We will evaluate all the options, and whatever is BESS in the interest of shareholders, we will use that.
All right, sir. Thank you.
Thank you. The next question is from the line of Piyush Garodia from Smart Sync Services. Please go ahead. Hello, sir? The current participant seems to have disconnected. The next question is from the line of Ronak Singhvi from NAFA Asset Managers. Please go ahead.
Hello. Am I audible?
Yeah.
Yes, sir.
You are audible.
I wanted to have your comments on the CERC draft regulations on cutting the ceiling price of 2 paise per unit to 1.5 paise flat fixed rate on Term-Ahead Market.
There is no draft regulation on this.
Okay, so it is just on development or-
No, no. We have not heard anything about this.
Okay, so what difference does it make if the volume is shifting from DAM to RTM? Like, as considering IEX revenue, like how does it differ from our revenue?
No, see, DAM and RTM both are our flagship products, and we have large market share in these products. So it does not really matter to us if the volume is shifting from DAM to RTM.
So, like per unit of volume means only there are transaction charges, right?
Transaction fees.
Whatever we-
Same in both DAM and RTM.
Okay, okay. Got it. Thank you, sir.
Thank you. The next question is from the line of Sandeep Saleria, an individual investor. Please go ahead.
Hello. Am I audible?
Yeah, you are audible. Speak slightly louder.
Yes. Thank you for the opportunity. My question is regarding the capital allocation. I think this was asked earlier, but I just want to give my couple of pointers. As CIO, if an independent power exchange asset with a market position and robust cash generation growth runway, if it was trading in the open market at today's compressed valuations, would you consider it a compelling acquisition target to deploy capital into? If answer is yes, then I do not understand why the management is hesitant to treat IEX own stock as a value opportunity for a share buyback. This is the first question. What are the special hurdles or cash prevention requirements are currently holding us back to be opportunistic at these levels?
Share buyback, as I told you, that we are definitely evaluating this, and we will consider this. This option is open. We are working on this.
Thank you. Second question-
Just like to add here, sir, to-
Yes, please.
Because there was a lot of changes in the tax buybacks couple of years back, so it was totally not that incentivizing the stakeholders. That was the reason the buyback. In the past, we had done buybacks earlier also, so that has been one of the options we had always explored. But considering the changes, now all the things have been re-bought back for the creating value for the buybacks. That's what we are considering, and we'll definitely put that before, as and when the board decided that.
Yeah, so depressed valuation, I think is a great opportunity because our business is in fact running great. Second question is on KCI integration, right? I'm also from a technological background, and I think, now can you please explain how tightly integrated we are with DISCOMs? I think the market is not giving us right valuation and they're thinking like it's like booking Uber and Ola. People can just migrate DISCOMs and start ordering from other assets. I think we are tightly integrated, aren't we? Through APIs, they are using our APIs, the DISCOMs. Can you please explain bit more on that?
Yeah. So, see, there are two interfaces that we have with our customers, with our members. One is for the purpose of bidding, and second is back office integration. Back office is for the purpose of linked with their SAP system or any other system that we have, and for reconciliation and reporting and all other purposes. So what we have done in last two, three years is, with all our major customers, we have integrated both on the front end as well as on the back office. Back office integration has been completed. So which means that when they have their own system of calculating for every time block how much surplus or deficit they have. Every distribution utility or every member will have their own system where they do certain calculations, they have their models.
There they figure out what sort of quantity they want to buy and they want to buy at what price. API integration means that our system is linked to that system, which means we fetch whatever is the decision of their model, we fetch it directly in our system, and we convert it into bids and fetch it directly into our systems. That is on the front end. As I mentioned, the back office integration where our system is linked to them so that all the reconciliation part, reporting part, settlement part is being done cohesively. These are the two things which we have done, and majority of our volume, large chunk of our volume is coming through these APIs, is being handled through these APIs.
Yeah. Just give quick moment because I know how hard it is for an organization to move just from one system to other system because the user training and everything. We are basically quite tightly integrated, I can tell. Oh, that is really appreciated. Thank you.
Absolutely.
Thank you. The next question is from the line of Rohan Gheewala from Axis Capital. Please go ahead.
Thank you. Just two quick questions. Firstly, if you can please share what was the market share of IEX in DAM and RTM segment in second quarter?
Yeah, our market share in DAM and RTM is always 99% plus. So maybe it is 99.2%, 99.3%, or maybe that kind of a number.
Okay. Secondly, for the second half of this fiscal, is the REC volume likely to remain the same band as H1, or how do you look at it?
It is very difficult to say about the REC volume because REC is no more a significant revenue creator for IEX. In the market also, REC volumes have reduced in other exchanges also because of this buyback option which has been given by the government now. Because a utility at the end of the year, if there is a shortage, they will say that, "Okay, we will deposit the money and comply with that." That amount also is, I think, about INR 35 plus. So REC prices are also around INR 310, INR 320, INR 330. So they don't see much value in buying the RECs at the moment.
Thank you, sir.
Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks.
Thank you, friends. I would like to thank each one of you for being part of today's call. Throughout the first half of FY 2027, 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. Thank you so much. Have a wonderful evening.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.