IEX Year End Review: DAM Prices Witness A Decline In FY24

Indian Energy Exchange (IEX) in its audited financial results for the fourth quarter & year ended March 31, 2024, found a total volume in FY24 to reach 110.1 BU which is a 13.7% YoY increase. 

In the audited standalone IEX financial results for the fourth quarter and financial year ending March 31, 2024, the company reported an increase in its revenue in FY’24 at Rs.550.8 Cr. It increased 16.2% YoY. The profit after tax in FY’24 at Rs. 341.4 Cr increased 16.7% YoY. The consolidated profit after tax in FY’24 at Rs. 350.8 Cr which increased 14.7% YoY. Quarter 4 Financial Year 2023-2024.

The total volumes in Q4FY’24 at 30.1 BU increased 15.5% YoY and the revenue in Q4FY’24 at Rs. 149.5 Cr increased 15.4% YoY. The profit After Tax in Q4FY’24 at Rs. 95.1 Cr increased 14.7% YoY. Whereas consolidated profit after Tax in Q4FY’24 at Rs. 96.7 Cr increased 9.5% YoY.

BUSINESS AND FINANCIAL PERFORMANCE HIGHLIGHTS

For the fiscal year 2024, IEX achieved 110.1 BU in FY’24, registering an increase of 13.7% on a YoY basis. Electricity volumes at 101.7BU increased 12.2% YoY. Electricity volumes at IEX crossed 100 BU for the first time. Additionally, 75.39 lac RECs (equivalent to 7.54 BU) were traded during FY’24.

REC traded volume in FY’24 increased 26.4% on a YoY basis. The Day-Ahead-Market (DAM) prices on the exchange declined to Rs 5.24/unit in FY’24, lower by 12% YoY compared with Rs. 5.94/unit in FY’23. During Q4 FY’24, IEX achieved 30.1 BU volume across all segments, registering an increase of 15.5% on a YoY basis.

This volume comprises 25.9 BU from the conventional power market segment, 1 BU from the green market segment, and 32.48 lac Renewable Energy Certificates (RECs) (equivalent to 3.2 BU). REC traded volume in Q4FY’24 increased by ~98% on a YoY basis. The DAM prices on the exchange lowered to Rs 4.89/unit in Q4 FY’24, a decline of 20% YoY compared with Rs.6.08/unit in Q4 FY’23. For fiscal year 2024, the Board of Directors of the Company announced a final dividend of Rs.1.50/- equivalent to 150% of the face value of equity shares.

On the power sector front, according to government data, India’s electricity consumption in FY’24 reached 1,622 BUs, representing a 7.7% increase on a year-on-year basis. On the fuel side, during FY’24, India’s coal production increased by 11.7% YoY to reach around 1 billion tons and coal dispatch to the power sector increased nearly 8.8% YoY to 810 million tons.

E-auction coal premiums continued to decline throughout the financial year. The coal premium under Shakti B8 action has come down to around 20%. Coal inventory on 31st March 2024 stood at nearly 20 days, the highest since 2021. The imported coal price at USD55/tons for April’24 represents a decline of 23% on a YoY basis.

This improved supply scenario resulted in increased sell liquidity at IEX, despite an increase in the country’s energy demand in the fiscal year 2024. In FY’24, the sell liquidity on the exchange increased by 17% YoY. The regulatory and policy landscape for the power market witnessed positive developments during the fiscal year.

Notable among these were the General Network Access (GNA) regulation, the Indian Electricity Grid Code (IEGC) regulations, and Transmission Charges Sharing regulations. In preparation for the summer months, the Ministry of Power has announced several measures, such as mandating the sale of surplus un-requisitioned power on power exchanges by all thermal generating stations and rescheduling of planned maintenance of thermal power plants to the monsoon season. Additionally, section 11 directions for operationalization of imported coal-based plants are extended till 15 October 2024.

Further, the Government has directed all gas-based power generating stations to operationalize their plants from May 1 to June 30 given the rise in electricity demand. On the gas market front, the Indian Gas Exchange (IGX) traded total volumes of 41 Million MMBtu in FY’24, lower by 20% YoY. The profit after tax for IGX for FY’24 is Rs. 23.1 Crores, about 18% lower concerning FY’23.