IEX - Indian Energy Exchange Limited Share Price

During the earnings conference call held on October 31, 2025, management provided a positive outlook for Indian Energy Exchange (IEX) amidst a robust macroeconomic environment.

Key forward-looking points outlined by management include:

1. Economic Growth: India reported a strong GDP growth of 7.8% in Q1 FY '26, with the Reserve Bank of India revising its FY '26 GDP growth forecast to 6.8%, up from 6.5%. This growth is expected to support electricity demand.

2. Power Demand: Electricity demand is projected to grow, with recorded power demand of 449 billion units in Q2 FY '26 representing a 3.4% year-on-year increase. Management anticipates sustaining a volume growth of 15% to 20% for the remainder of FY '26, even while noting flat demand in the first half.

3. Segment Growth:

   • The Real-Time Market (RTM) segment saw substantial growth, accounting for 36% of volume, surpassing the Day-Ahead Market (DAM) for the first time.
   • RTM volumes increased to nearly 15 billion units, up 39% year-on-year.
   • Green market volume rose 17.7% year-on-year to 3 billion units.

4. Operational Improvements: The company expects the implementation of market coupling and several regulatory changes, including virtual power purchase agreements and draft amendments that support increased liquidity and reduced prices on exchanges.

5. Carbon Trading Initiative: Management indicated that carbon trading regulations are being finalized, expected to kick off in a year and a half, with the market size comparable to renewable energy certificates.

6. Business Development: Focuses on introducing new products like a peak DAM and peak RTM segments, as well as diversifying into coal and carbon exchanges to broaden revenue streams.

In summary, management reflects optimism based on current trends in economic growth, expected power demand, and evolving regulatory frameworks supporting IEX's operational growth and diversification strategies.

Question 1: "What is the status of implementation of market coupling? Are you guys asked to make a software or what has been the progress? Is it on time for implementation by Jan 2026?"

Answer 1: We are not aware of any specific developments regarding market coupling. Discussions with exchanges and Grid India are essential to work out the implementation details. To the best of our knowledge, no contact has been made for software development or other related tasks.

Question 2: "How will IEX play a role in the coal exchange and in the carbon exchange?"

Answer 2: For the carbon trading, CERC will regulate it across existing exchanges. We are prepared to engage in carbon credit trading. As for the coal exchange, we'll apply for licensing once the regulatory framework is established, and we are actively preparing for this opportunity.

Question 3: "What is the volume growth guidance for FY '26 and FY '27?"

Answer 3: So far, we have seen a 16% volume growth, and for the remaining period of FY '26, we expect to maintain a growth rate of 15% to 20%. It's challenging to predict beyond that, but we anticipate continued growth aligned with economic expansion.

Question 4: "Is the muted power demand growth attributed to weather, and how is the C&I sector performing?"

Answer 4: Yes, the current weather conditions, including good rainfall, have affected agricultural and domestic demand negatively. However, we observe that demand in the C&I segment continues to grow, though we need specific data to quantify that increase.

Question 5: "With RTM volumes surpassing DAM for the first time, can we expect this trend to continue?"

Answer 5: Yes, as availability and liquidity in the power market improve, we anticipate RTM volumes will continue to grow, primarily due to lower prices attracting distribution companies to buy in the RTM market. Thus, the trend seems sustainable.

Question 6: "Regarding IEX's stake in IGX, what is the timeline for reducing it below 26%?"

Answer 6: We must reduce our stake in IGX to below 26% by December 2025 as per regulations. We've requested an extension, and the regulator has been supportive. We're exploring options for divestment while complying with the regulations.

Question 7: "Why is there a significant difference between US gas prices and GIXI prices?"

Answer 7: The US prices are based on Henry Hub, ideal for their surplus. When importing gas to India, costs rise significantly to about $10 to $12, due to liquefaction and transport. Thus, the difference is expected given local market conditions and transportation logistics.

Question 8: "What steps is IEX taking for diversification post market coupling?"

Answer 8: It's crucial to clarify that coupling has not yet occurred. We're actively working to retain our market share and have been experiencing growth. Our ongoing development projects aim to enhance customer engagement and increase transaction volumes.

Question 9: "What is the potential volume from the carbon trading once established?"

Answer 9: The carbon market's volume largely depends on the compliance of industries with greenhouse gas emission norms. While exact forecasts are challenging, we believe the market could mirror past trends seen in the REC market if compliance patterns follow suit.