Indian Energy Exchange Limited (IEX) Earnings Call Transcript & Summary

Very good morning to everyone. Myself, Vineet Harlalkar, CFO, Company Secretary and Compliance Officer of Indian Energy Exchange Limited. It gives me immense pleasure to welcome all of you to the 20th Annual General Meeting of Indian Energy Exchange Limited. This is being conducted virtually in accordance with the circular issued by the Ministry of Corporate Affairs and SEBI. The AGM is conducted through virtual platform, which enables enhanced and broader participation of our esteemed shareholders. Embracing this innovative approach enable us to surpass geographical constraints and extend the reach of the AGM, granting shareholders from diverse locations the opportunity to engage actively in our proceedings. I'm pleased to welcome our Board of Directors to the 20th AGM and introduce them to you. We are joined on the webcast by our Honorable Chairman and Managing Director, Shri Satyanarayan Goel. He is also a Chairperson of Investment Committee and member of CSR Sustainability Committee, Enterprise Risk Management Committee and other Board committees. He is a 45 year of rich experience in different areas of our sector. We are joined by Mr. Sudha Pillai, our Non-Executive Independent Director, retired IS Officer from Marla Car. One of the foremost woman women to serve the Indian Civil Services is also Chairperson of Audit Committee, Nomination and Remission Committee, CSR and Sustainability Committee and other various committees. Shri. Pradeep Kumar Poojari and Non-Executive Independent Director, retired IS Officer from Gujarat cadre. He held esteemed position of the Secretary of Government of India and the Ministry of Power and also served as the Chairman of Central Electricity Regulatory Commission. Chairperson of Stakeholder Relationship Committee and a member of Audit Committee and other Board Committees. We are joined by Shriingheshab Chopra, our Non-Executive Independent Director. He is the Founder and CEO of Bharat Light & Power, a leading renewable energy generation and technology company in India. We are also joined by Shri Amit, our Non-Executive Director, a member of Audit Committee, Stakeholder Relationship Committee, Investment Committee and other committees. He is a seasoned business professional with almost 30 years of diverse functional experience across multiple industries and is also Co-Founder of -- and Global Private Limited. We are joined by Shri Goit Bajaj, our Joint Managing Director. He has over 30 years of experience in energy sector. He's also a member of Stakeholder Relationship Committee, Enterprise Risk Management Committee, CSR and other. Due to some professional commitments, Sri Gautam Daria and Shri Rajiv Gupta, directors of the company are unable to attend this meeting. Apart from our directors, our statutory auditors and secretarial auditors have also joined the meeting through their respective locations. Mr. Ankit Jain, Practicing Company Secretary, has been appointed as a scrutinizer for this meeting to ensure that voting process is conducted in a fair and transparent manner. He has also joined the meeting through the virtual mode. We again welcome you all to the 20th Annual General Meeting of the Indian Energy Exchange Limited. Now before we proceed further, I would like to highlight certain points regarding the participation in the meeting. Facility to join the meeting was open 30 minutes before the scheduled time of the AGM at 10:30 a.m. and shall be kept open throughout the proceedings of the AGM. The Q&A session will take place when the Chairman opens the floor for the questions and answers. For a smooth conduct of meeting, all the lines of shareholders will be on -- the proceedings of the AGM are being recorded and will be hosted on the website of the company after the AGM. The certificate from the secretarial auditors compliance with SEBI share-based employee benefits and certificate regulation, the ratio of directors, AMP and ratio of contracts and arrangement, along with other statutory documents are made available electronically for inspection by the members during the AGM. Members are requested to refer to the instructions provided in the notice. And in case members face any difficulty, they may reach out to the helpline numbers. Now without any further delay, I request Sri Satyanarayan Goel, our Honorable Chairman and Managing Director, to occupy the chair and decide over the meeting.

Thank you. Good morning, ladies and gentlemen. On behalf of the Board of Directors of Indian Energy Exchange Limited, I Satyanarayan Goel, Chairman and Managing Director of the company, extend a warm welcome to each one of you for attending the 20th AGM [indiscernible]. Meeting is being held virtually through the video conferencing, every effort has been made to ensure that shareholders can participate effectively and conveniently. The company has implemented all requisite measures to facilitate smooth participation and voting through electronic means. As the time is already past 10 a.m. and the requisite quorum is present at the AGM, I hereby declare that the meeting is in order and commence the proceedings of the meeting. I will now commence with the [indiscernible]. India remains one of the world's largest growing major economies recording GDP growth of 7.7% in financial year '26. Looking ahead, the Reserve Bank of India projects growth of 6.6% for the current financial year, reinforcing India's path towards a $5 billion economy before 2030. India's total electricity consumption during last year had reached 1,707 billion units and during the first 4 months of this current financial year, economic activity remained resilient and India's electricity consumption reached more than 650 billion units during April to July 2026, registering a growth of almost 9.1%-on year-on year basis. To meet increasing power demand, India witnessed a capacity addition of 58 gigawatt across thermal and clean energy sources, taking total installed capacity to 53 gigawatts. Renewable energy constitutes almost about 275 gigawatt of this total, representing more than half of the total installed capacity. Power exchanges are poised to play an increasingly vital role in ensuring that a growing share of clean energy reaches consumers efficiently and at competitive rates. Adequate fuel availability during last year supported electricity market stability throughout the year. Domestic coal production was ample. It touched almost about 1 million tonnes, and we had very comfortable level of coal stock at the power plants, which was for almost 25 days. Strong supply conditions improved liquidity on our platform and enabled efficient price discovery -- average market trading price was only INR 3.8, which was down 14% on a year-on-year basis, providing saving opportunities for the distribution companies and C&I consumers. During the year, there was a strong regulatory and policy support from the government, including the and the regulators, including the Kraft Nationality Policy, Kraft Electricity Amendment Bill and other initiatives, which have laid the groundwork for deeper power markets. The government aims to promote exchange-based routing of long-term contracts, phase development of capacity market, demand response, distributed storage and peer-to-peer trading through a UPI India energy stack. The government further seeks to promote open access with a progressively declining [indiscernible]. Further CRC has issued final guidelines for virtual power purchase agreements in December 2025, recognizing power exchanges as the authorized platform for sale of renewable power. Subsequent to the greenhouse gas emission targets set by the Ministry of Environment, carbon credit trading is also expected to start on the exchange platform during this year. Additionally, CRC has initiated discussions for shortening the gate closer from 75 minutes to 50 minutes, which will increase liquidity in the real-time market. On the business front, in financial year '26, IEX delivered a strong growth with electricity traded volume increasing to -- increasing by 17% on a year-on-year basis to 141 billion units despite softer demand during the first half of the financial year. market was a key driver of growth, growing at a rate of 41% on a year-on-year basis and we traded almost about 5 billion units in the real-time market, which was 40% of our total, providing flexibility to renewable grid. In financial year '26, our consolidated revenue increased by 13.6% to INR 747 crores and profit after tax increased to 14.9% to INR 499 crores. The Board announced a final dividend of INR 2 per share, taking total dividends to INR 3.5 per share or 30% of the face value, reflecting our ongoing commitment to enhancing shareholder value. On our product initiatives, we are seeking regulatory approval to introduce green real-time market, extend the terminal market contract duration from 3 months to 11 months and also have applied for peak contracts during the morning and evening hours. I'm sure these products will further lead to increase in the volume on IEXcom. Dear shareholders, our diversification strategy is transforming IX into a multi-exchange energy group. Our associate company, IGX in financial year '26 traded a volume of 6.8 million MMBtu of gas with PAT INR 42 crores of 28-on-ilPOGX [indiscernible] is offering to sell 2.3% of our stake to align with PGRquducingare from 47.3% to 25%. Our wholly owned subsidiary is accredited issuer of IRC and has issued 19 lakh certificates in financial year '26, a growth of 200%, recording a profit of INR 4.7 crores. Further Ministry of Coal has issued regulations for the coal exchange and thereafter, we have incorporated the Indian Coal Exchange Limited to support the development of a structured coal market in the company. And coal market immediate potential of almost about 100 million tonnes Ministry of Mines has also issued draft rules for the mineral exchange. We are also exploring opportunities for diversification in this area by setting up a mineral exchange. I would like to update you that in July 2025, CRC had issued an order proposing implementation of market coupling in the dead market, pursuant to which IX filed an appeal before the act and subsequently the Supreme Court. Both forums observed that market coupling cannot be implemented by this order of CRC. It can only be implemented after the regulations are issued. And hence, I is not agreed at this stage and they do not want to inter this case. And they have also mentioned in the order that if IX is agreed by the regulations, they can approach the appropriate forum and also all the grounds which are raised in this appeal. So all the grounds are reserved. Meanwhile, CRC has issued draft regulations for marketing shareholders during the last 3 years, we have undertaken several initiatives to strengthen customer relationship and technology capabilities, including extensive customer interaction, API-based bidding, back-office integration through API, data analytics and enhanced web portal, customer-centric digital solutions and also strengthen cybersecurity safeguards. Further, in the last 5 years, we have introduced multiple products such as real-time market, GDAM market, GTAM market and long-duration contracts. As a result of which the share of the day ahead market, which earlier used to be almost about 90% 6, 7 years back, has today come down to only 40% and the volumes in the other products have increased significantly. With our customer centric initiatives and 18 years of track record of trust and deep customer engagement, we are sure that we will be able to retain our customers and strengthen our market position even post coupling, and we believe that coupling may not have significant impact on volumes. Dear shareholders, India is a developing economy and its GDP will continue to grow at a rate of 6% to 7% for the next 15, 20 years. As a result of this, electricity demand will continue to increase, which will provide significant growth opportunity for IEX. Further expanding industrialization, railway electrification, AI-driven data center growth, EV charging demand and battery storage deployment will continue to drive exchange-based trading. Battery storage projects supported by viability gap funding will help shift solar power to peak demand hours providing roundtheclock power to the market. Emerging opportunities in renewable power, electricity derivatives, carbon markets and rooftop solar peer-to-peer trading will further strengthen the ecosystem. As technology and regulatory reforms reshape the sector, IEX remains committed to working with stakeholders across the value chain to unlock the next phase of energy market growth. In conclusion, I thank our shareholders for their continued trust and support. On behalf of the Board, I also extend our sincere gratitude to the Ministry of Power, CRC, CA, NLDC, RLDC, SLDC, SERC exchange members and clients, financial institutions, bankers, business partners and all other stakeholders for their invaluable support. We remain especially grateful to our employees and investors whose contribution continue to drive success. Thank you for your trust and partnership. Moving further, the notice of the 20th AGM together with the annual report for the financial year '26 was already sent by electronic mode to all the shareholders and was also made available on the company's website. With the permission of the members present, I take the AGM notice as read. Moving ahead, the statutory auditors and secret auditors have expressed unqualified opinion in their respective audit reports for the financial year '25. There were no qualification, observations or adverse comments on financial statements. The statutory auditor's report on stand-alone financial statements and consolidated financial statements and secretarial auditor's report are available in the annual report. With the permission of the members present, I take these reports as read. Before we take up the items as per the notice, I would like to inform that company has provided a facility of remote e-voting to all the shareholders to cast their votes electronically on all resolutions set forth in the notice. The members who have not already cast their vote by means of remote e-voting may vote through Insta poll facility provided on the AGM portal provided by KFin Technologies Limited. I now order for Insta poll to be conducted on all the resolutions as set out at items 1 to 3 of the notice of 20th AGM, post which we can commence the question-and-answer session. The resolutions in respect of business proposed to be taken up at this meeting have already been circulated to all the members. With your permission, I take them as read. The Insta poll facility is now activated for members who are participating in this meeting and have not already voted through the remote e-voting facility. The Insta poll facility will remain active throughout the meeting. The combined results of the remote e-voting and the e-voting conducted at this meeting will be announced and made available on the website of the company and the registrar and transfer agents within 2 working days of the conclusion of the meeting and the voting results along with the scrutinizer's report will also be submitted to the stock exchanges. I authorize Mr. Vineet Harlalka, CFO and Company Secretary to receive the scrutiners report and communicate the to the stock exchanges and also on the website of the company immediately after the declaration of the results. Dear shareholders, now we can commence the question and answer session

Our first speaker shareholder Abhishek Kumar Sinha?

Sir. Greetings to the board of directors, shareholders and [indiscernible] Trust the management to continue adding immense value to India's energy transition and shareholders of the company. I have 3 questions. First is, what is the status of IGX IPO? The second question is what share of long-term PPA and virtual PPA pool can realistically be optimized through exchanges over the next 3 to 5 years? And the third question is, do API integrated clients trade more frequently over other users?

Thank you. We'll move to our next speaker shareholder, Mr. Sandeep Saha.

Okay. So respected Chairman, Board of Directors and my fellow shareholders, my name is Sandeep Sara. So as a long-term individual shareholder, I do not view my shares merely as a ticker symbol on the screen, but consider myself a true partner in this business. And because I view capital allocation strictly through the lens of long-term value creation, I align with Warren Buffett and Charlie Manga's core philosophy, which is when a high ROC cash-generative business trades at a discount to intrinsic value, repurchasing shares is the single most accretive decision management can make for the continuing partners. Over recent quarters, while our core exchange platform continues to generate robust cash flows with minimal CapEx requirements, our stock price has faced persistent market pressure. yet management's capital allocation remains overly conservative, relying primarily on dividends and accumulating cash reserves rather than capitalizing on this mispricing. Now with SEBI's framework allowing open market buybacks through stock market exchange and open market buyback is an ideal strategy for IEX. -- buying shares directly of the market enable us to act like true value investors, canceling the maximum number of shares at bargain prices, permanently boosting EPS and establishing a strong price flow. So my -- I ask management to address these 3 specific points. What quantitative hurdle rate or intrinsic value threshold does the Board use to evaluate share buybacks against holding cash? Second is why has management delayed initiating an aggressive opportunistic market buyback at current market prices? And third is, does management recognize a strong signaling effect and open market buyback sense regarding conviction in IEX business mode and earning power.

Thank you very much. Thank you, sir. We'll move to our next speaker shareholder, Mr. V. Chandran.

Good morning, Chairman, the other Board members and also those who are attending the AGM from within and outside. My hearty congratulations for a good performance last year. And dividend payout is also good. We can't expect more because you may have other requirements for expanding the business. My first question is on the CRC matter. See, decoupling, coupling, lots of discussions happen in channels. I am not able to figure out whether there are campaigns or a normal business discussion, I'm not able to figure out. Please throw some light on the status and also, see, in any business, there will be difficulties, there will be problems. But sometimes it looks as though the business is going to collapse. That kind of discussion happens in channels. So we would like to understand from you whether it is so or it's some kind of campaign. That is my first point, sir. Second point is on the revenue, whether you get from generators as well as the buyers, your revenue profile that you can clarify it's more for my understanding. And is there any proposal to invest in DESS -- because in times of shortage, probably you can supply from your own sources. So it may be a bit contradictory, but just to understand. And this coal exchange and gas exchanges, coal exchange, is it 100% subsidiary? My next point is on the promoters. Why there are no recognized promoters? When we started investing in 2022, promoter holding was some x percentage. Gradually, it got diluted and there is no promoter as such in the company. I don't know if some promoter has been derecognized, I do not know. He wanted to get recognized, I do not know. Then my next point is on the median salary. The difference between KMP and others, it's too huge. I don't know the reasons. There are some mistakes which I noticed in the annual report. One is on Page #41, you have given the installed capacity of renewable as well as totals. Totals are not missing -- sorry, matching. The nuclear power last year, it was 8 gigawatt. This year, it is quoted as 8 gigawatts. It's a typo error, it should have been 9 gigawatt -- so this may be collected before filing the annual report with the exchange or you can refile it. Then Mr. Gautam Dalmia, he has attended all the meetings, but leave of absence has been mentioned in the annual report. And one request is on the printed annual report. I find it very convenient to take notes, cross references and all. So though I requested it has not come, it's not a complaint. From next year onwards, I would request the secretarial department to consider sending the annual report, colored annual report printed -- and my last point is on the GSE equity capital is mentioned wrongly. In peer comparison, it is mentioned that 89.09 take the shareholding 100% mentioned 89.16 which matches with the annual report number. So this may be corrected. Sir, I wish you all the best and for a good performance in future. Thank you.

Thank you for corrections which you have indicated and we will take care of. We'll move to our next speaker shareholder, Mr. Anil...

Good morning to all. This is Anil Mehta, attend the Annual General Meeting of the company from my resid, Kandivali Mumbai. From my side, 2 questions, sir. The first question is that looking to the global situation, how much growth can we expect and how much it will affect to our revenue and bottom line in the current FY 2026, '27? And the second question is what is the effect on our company -- with this, we are the shareholder supporting all the resolutions and thanks to the secretary department for their cooperation and support and all the best for the bright future of our company.

Thank you, next speaker...

Boecretfunil Kumar joining this meeting from my Sk20thGMEXroudE. First of all, I thank the company Secretary and the secretary team for giving me the opportunity to speak at this platform. Sir, I congratulate the management for the good result. Sir, I have a few questions. What is the road map for next 2 years? What is your future plan? Number three, what is the growth and strategy of IEX I support all the resolutions and voting in favor of and hope for the best in coming years. On this fest,a,etera, I convey my best wishes for you, management and employees of IEX for prosperous and meaningful future of the company for you and your company. Sir, the -- remember the festive season with your speaker shareholders and reward them with the festive greetings. With this, I conclude. I hope that our company will be in better hand and will do better in the coming years. With this hope I conclude my speech. Over to you for further proceedings. Thank you.