Thank you very much. We will now begin the question and answer session. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Good evening, Sir and Congratulations on a good quarter . Sir my first question is on the new GNA regulations that kicked in from October I guess, sir, have you gained any market share after the new GNA regulation kicking in and can you please quantify market share in Q3 FY24?

Yes, our market share for Q3 has definitely improved , if you were to compare with Q1 and Q2. As I told you that DA C volumes have reduced . I f you take all the three exchanges together then also there is a significant reduction in the trading volume in the D AC and that quantum has entered DAM market and RTM market.

Is it possible to quantify the market share?

So in the month of November and December, November our overall market share was 91%. December it further increase d to 95%. If I talk about quarter as a whole, it is little below 90% about 87% to 88% so we have seen significant improvement. I am talking about total including certificates. So if I talk about electricity in December, it is 97% to 96% so that way, we have significant improvement in the market share with the correction of movement of DAC and movement from DAC to DAM markets.

Sir the second question is on the surplus at power plants selling to exchange which you mentioned. Sir this has been in the talks for the last few years. Has there been any changes in this particular quarter, in the sense, has the government come out with a new regulation or new notification, which we should believe can increase the liquidity on the exchanges because of this particular …Can you please comment on that.?

Your question is not clear. Can you please repeat?

I got your point. See..earlier as per the earlier systems and processes the consent of beneficiary was required by a generator for offering the power on the exchange platform . Now under the GNA and the new electricity grid code the consent of beneficiary is not required. So a generating company if the URS power is there, they can bid that power on the exchange platform without obtaining the consent of the beneficiary, so this is a significant change in the electricity grid code itself . F urther to this , Government of India also has now issued a draft rule wherein they have said that the generating company must offer that power on the exchange platform and if they fail to offer that power on the exchange and they fail to submit sell bid of that, that quantum will not be counted towards their fixed cost recovery. I mean their DC computation which will impact the ir fixed cost recovery. So because Government of India wants that liquidity in the mark et should improve, and I am sure these rules are going to be finalized maybe within this month and already we have started seeing volumes from the generating companies , the URS power getting bid in the exchange platform so liquidity has improved because of that.

Understood Sir. Thank you and all the best Sir. Thank you.

Thank you very much. The next question is from the line of Guy Spier from Aquamarine Capital. Please go ahead, sir.

Thank you very much. I think the whole of India should b e grateful for the extraordinary work the India Energy Exchange is doing in facilitating the provision of electricity to the whole of India and I think you are an amazing team . I wanted to get your update on the comments for the Central Electricity Regulatory Commission .If the Power Ministry eventually takes a decision on market coupling when will be your best estimate of when they will take it an d I would imagine that if they deci de to go there that is going to have to be a lot of discussions on exactly how to implement it and what the market procedures will be and even which contracts they might start working with first ? I cannot imagine they would do it all at once so I would love to get your take on where that is , where your discussions are and how you see it unfolding from here. Thank you.

Yes, first of all thank you very much for complimenting and with regard to market coupling, let me first tell you the events which have happened . I think in the first week of June there was a letter from Ministry of Power for implementing power market coupling to CERC. CERC issued their discussion paper in the month of August, and they invited suggestions on that and almost about 127 person s submitted their suggestions and comments. And in that also what we find that more than 70% persons they were not in favor of coupling. If you look at all these comments are hosted on the C ERC website, you can have a look at yourself . All eminent persons of the sector and e xperts of the sector they have opined that market coupling will not bring any value in the market and the need of the hour is basically to improve more liquidity in the m arket. At the present arrangement the three exchanges are competing with each other so if you do the coupling it wi ll stiffle the competition and innovation. And so based on the comment received I am sure there are few comments where the alternate options were suggested. So what we understand is that CERC is now also exploring and analyzing the alternate options given in some of the suggestions and maybe at appropriate time they will take a view on that whether there is any merit in implementing market coupling or not . So I will not be able to give you any time frame when CERC will take a view on that. After CERC takes a view on that then also the process is quite long because they will come out with the draft . They will discuss on paper again on the new concept and then t ake comments on that . T hey may come out with the draft regulations, finalization of the regulations , development of software and laying down the settlement mechanism. I mean doing the mock drill for that, so it is a long-drawn process.

Thank you so much and I would also just to confirm , I would imagine that developing that new system if it ever comes about would be with the involvement of the existing market players to ensure that energy continues to be traded smoothly so you would be closely involved in the development of that system?

Yes, yes I mean whatever is done by CERC that is in a transparent manner and with the involvement of all participants.

Thank you so much and thank you for you r great work . You are a great Indian institution, and I am proud to be associated with you as you know. Thank you.

Thank You. Thanks a lot.

Thank you very much. The next question is from the line of Ankit Kanodia from Smart Sync. Please go ahead.

Thank you for taking my question . My question is again related to market coupling but just slightly on a different note . So in our call we have been very clear that if market coupling comes in, it would lead to de ath of innovation in the market right in the exchange market . But we see some of our competitors celebrating market coupling. So can you throw some light as to how can market coupling be beneficial for one player and not beneficial for others?

See the point is I will always tell the side of the story which suits me, and same thing is true for the other exchanges also , that is why there is a regulator . Regulator is an independent body. They will take a view considering what is good for the sector and that is why they showed the staff paper and in the staff paper if you see the suggestions received are not only from the thre e exchanges . T he suggestions received are 124 . T here are other 124 participants who have made comments on that and these include sector experts. You can say they are members of the C ERC, ex-members of the CERC, ex-Chairpersons of CERC and Central Electricity Authority, ex members of the Appellate Tribunal, ex Secretaries of the Government of India. I mean ex-State Regulatory Commission Chairman and maybe from IIT and IIM and NGOs. So all those persons have made comments on that . Please have a look at those comments. You’ll yourself be convinced that market coupling probably will not add any value but anyhow we have to leave it to the regulator . T hey have to decide about it. It is their prerogative to decide what is to be done in the market but I can only tell you that implementation of market coupling is a major change in the market design so I am sure regulator will take a view considering all aspects and then implementation of that als o is a long-drawn process.

Got it. Thank you so much for that detail ed answer. My second and last question would be related to the International Carbon Exchange which we are planning? Can you give us some color as to where we are in that and how do we see that shaping up in the next couple of years. Any qualitative and quantitative details you would like to throw?

Yes in the interna tional carbon exchange ,we are still working on that because the transactions are basically mainly wi th the Indian sellers and international buyers . So these are going to be I mean dollar and rupee transactions and it is difficult to facilitate this kind of a transactions on exchange platform so we are now exploring the option with the Gift City to launch this exchange from the Gift City so that we can do dollar to dollar transaction. And we had a couple of interactions with the G ift City officials and they are also very supportive of this. Let us see if it materializes in the next couple of months.

Okay so maybe in FY2025 we can expect some transactions here, some notable transaction?

We are desperately working on that, and we intend to launch that as soon as possible.

Thank you so much Sir and all the best.

Thank you very much. The next question is from the line of Nikhil Abhyankar from ICICI Securities. Please go ahead.

Yes. Earlier in case of REC, the RP obligation was separate for the solar, separate for the wind, and separate for the hydro, all those things were separately specified . And as a result of that some states , I mean the inventory for the solar was higher, wind was lower so there were problems in that . But now after creating fungibility , all REC are in one category and there is a multiplier effect based on the technology . So now the obligated ent ities can buy that REC to meet the requirement . All the obligations are again combined together. So, I mean that has basically increased liquidity in the sell side and also made it simpler for the distribution companies to meet their obligation.

Understood and Sir would you be able to also mention what will be the industry wide like the system wide inventory level for REC as of say on December?

Pardon.

The system wide inventory level of REC?

Yes, inventory is very, very high in the market now. It is almost about more than 2.5 Crores REC are there in the market . S ee now there is a mechanism that even distribution companies if they have renewable power at their disposal which is more than their RPO obligation they also can get REC. So as a result of that there are distri bution companies like Karnataka, Telangana, Andhra Pradesh , and Himachal Pradesh they also have REC and then the generators REC renewable generators . So the combined REC volume is quite significantly high.

Okay and the last question what were the long-term volumes in Q3?

So, in Q3 this volume is about 3 billion units. Now a days every month we are doing close to 1 billion unit trade in longer duration contract so total in nine months we have done close to 7 billion units which have picked up in the later months . But if I compare it with the last year, last year total in complete year itself we did about 2 billion unit s so there is a massive increase in LDC volume.

Okay Sir and should we expect that in Q4 ahead of the summer season , this volume can really spike because most of the DISCOMS would like to have requisition power for the summer season?

Yes. So there is lot of interest now as you rightly said, because for the summer season there is a visibility that probably there is going to be deficit again . So many of these distribution companies they want to come to the market at this point in time and lock their procurement for the coming months. So we are working towards achieving even better number in months to come.

Okay sure Sir. Thank you and all the best.

Thank you very much. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.

Thank you. My question is in relation to the flurry of firm dispatchable RE tenders that we have been seeing over the past few months . Basically as the electricity storage solutions evolve and t his becomes more and more prominent , what implications does it have for the volumes that come to the short -term market and particularly to the exchanges . And also if you could combine this answer with the opportunity that you see with the RE capacities that would be set up for green hydrogen over the medium term . Again what could be the quantum of associated generation that if possible could come to exchanges?

See first of all let me tell you the basic principle . The renewable energy generation capacities there are lot of variation in that. There is lot of volatility in that. Whereas demand is practically fixed . So buyer will have to have other sources of power also to meet the demand and it is seen that the countries where renewable generation capacity has increased , the exchange transactions have also increased because on the exchange platform you can do integration of different resources in a more efficient manner. Like for the storage capacities. The battery storage system or the pump storag e system there the cost of generation is going to be higher, and exchange can provide that high price during the peak hours . So I am sure with higher renewable energy capacity and the storage systems , t he exchange will be definitely a preferred option . Even the Government of India is talking about the storage capacities under the viability gap funding system and there also the mechanism being explored is that the sale of power is at least on the exchange platform during the peak hour so that the maximum realization of revenue can happen on that.

Sure, and so basically if you look at the period FY22 to 1H FY 24 I mean the share of exchanges has not really increased in the total power consumption ? It has gone from 7.4% to 7.1%? The overall short-term market has also stagnated at around 13.6 % to 14%? In the next four to five years based on how renewable penetration is going to increase, how do you see the share of short -term market going up ? What is going to drive that and how is the share of exchanges within the mix going to increase? Maybe a three year time frame?

This is very difficult to say about what is going to happen in future , but I can tell you in the past if you look at the last five years our volumes have increased at a CAGR of I think more than 16% to 17%. And I am sure with the high renewable this number will be further better.

Sure, so you had mentioned that in European markets already you have renewable capacities which are coming to the market under the…

Let me tell you one thing in case of the European mar kets. They have a market framework even at the retail level . So competitive framework at the retail level also, so I think their model is more competitive and exchange transactions are more in those countries . But the trend is that with the high renewable exchange transaction also improve . The share of exchanges increases significantly.

So, are we seeing more renewable capacities being set up on a merchant basis now in the next couple of years?

Not necessarily. We have seen States having high renewable at their disposal under the PPA. They sell more power during high renewable generation capacity period and there are distribution companies who buy that power . What is required is we need to have capacity addition in the sector.

Yes, so for time of the day requirement of mee ting power especially during evening peak hour’s exchanges could prove a very important tool to manage that situation?

If you look at our real time market, the real time market volumes have increased to almost about 30 billion units now . And the share of real time market is increasing . I t is mainly because of these things that with the renewable capacity addition taking place there are participants who are selling power on the exchange platform whenever t he renewable is high and there are other participants who are in need of power, they buy it.

Thank you so much for answering my questions.

Thank you very much. The next question is from the line of Sagar Vijaybhai Shah from Shah & Co. Please go ahead.

Thank you for the b rief insight on the quarterly update on the results . So I was just going through the replies which the members have commented on the Staff report which the CERC has asked for . So I was going through IEX reply also in that the company has mentioned that this may be unconstitutional as well and this because the objective of giving the license to I EX is also based on some sound principles , which if the market coupling is happening then it is violating and it may be unconstitutional . So if you can just throw the light on that?

I think our suggestions to CERC are very detailed and they are self-explanatory. I will request you to go through them and you can I am sure get more clarity from the filing. I do not think…those suggestions are I think in 30 pages, and I will be able to detail them out on this call. Thank you.

Thank you very much. The next question is from the line of Bharani Vijay Kumar from Avendus Spark. Please go ahead.

Good evening Sir. This is Bharani from Avendus Spark . S o my first question is on our GDAM and GTAM volumes like can you elaborate the reason why it is on a declining trend this year compared to last year?

Yes, in the Green market, see we do not have significant merchant generation capacity in the green area. Mostly that green power sale was coming from distribution compan ies who have green power beyond RP obligation and more of it from Karnataka. T his year Karnataka demand, there was a significant increase in the demand (in Karnataka) almost about 30% , mainly because of shortfall in rain in Karnataka during that time when wind generation happens. Earlier they were selling that power . This year their own consumption was high, so the sell was less on the exchange platform because of that . Otherwise, as far as the demand is concerned there is a huge demand for green power and the premium over the conventional power in the green market is also almost about 40 paisa to 50 paisa per unit.

The second question is on the recent developments on open access and on the revoking or receiving of any license requirement of transmission for renewable projects or any new projects to be set up by the developer . So how are all these things having a positive impact on our open access volumes if any or will it have any positive impact in the future?

All these things are basically for development of the market and development of green energy in the country . And as I told you anything which leads to capacity addition in the sector is going to be positive for the exchange also . So, these things will be positive but let us see about the implementation of this because these kind of things will take time for implementation and seeing the result of that. These are all futuristic issues.

Thank you very much. The next question is from the line of Devesh Agarwal from IIFL Securities. Please go ahead.

Good evening everyone and thank you for the opportunity . My first question is on the long duration contract. So if you see one of the benefit of exchanges was lower prices compared to the bilateral market and that has been driving the move from bilat eral to exchanges? All your new contracts that you are seeing in the LDC can you give us a comparison in terms of prices that we are seeing in the LDC market versus the bilateral market?

I can only tell you one thing that the practice which distribution companies are adopting is they do a tender on DEEP platform and also for that they have some time available to give their consent . During that time they run the auction on the exchange platform also and invariably they find lower rate on the exchange and they get into a contract from exchange platform. So on a case to case basis it is very difficult to give you a comparison for each because these are different tenders coming out at different places , but definitely exchange prices are lower.

But can you say that 10 % to 20% could be the difference or even that will be difficult to, see?

10% to 20% is a very, very large number what you are talking about. This is normally you can say about 20 paisa to 25 paisa per unit.

20 paisa to 25 paisa per unit

Yes, maybe which is about 3 % to 4%. See a generator is giving a competitive rate on the exchange platform because he is getting payment on daily basis, so his working capital requirement is less, and he is basically saving cost there in that . And then he is assured of payment, so that is why a generator is offering competitive price on the exchange platform.

Right and Sir you did mention about the incremental supplies coming from the imported fuel projects but if we just want to understand better over the next two quarters when we will see the peak demand , what is your sense in terms of how much incremental supplies can come from which segment which can help us meet the demand and drive the exc hange volumes based on your past experience?

See number one , last year also Government of India has given direction for the imported coal based power plant to run . But last year t he coal prices were itself very high . T he variable cost was something around during this time of the year March to April, I think it was about Rs.8 to Rs.9 per unit, but now the coal prices have come down so variable cost is only about Rs.4 to Rs.4.5 per unit. So I am expecting the imported coal based power plants to run at the full capacity , which is something about 10 ,000 to 12,000 megawatt , that capacity is going to be available and another thing is the gas based power plants . Gas rates also have come down. I was seeing today, the West India Marker (WIM) is about $9 . the futures of the LNG are being traded for the month of March at $7 to $8. So if it comes down to $7 , the variable cost with LNG will be only about Rs.6. So today we have 25,000 megawatt of gas based capacity. O ut of that almost about 12,000 megawatt is on burn, so that can start generating power. So there is lot of capacity 12,000 megawatt of gas, 10,000 megawatt of imported coal and also the new generation capacities are under construction and commissioning . So we are expecting by March even almost about another 4 ,000 megawatt to 5,000 megawatt capacity will get added so taken together this summer things should be comfortable.

Understood. And Sir on REC we have been seeing that the prices have corrected significantly versus what they were earlier. Does this pose any risk to our exchange tariffs?

Yes, exchange volumes have significantly increased in the month of December. I think Q3 our volume was 65% with respect to Q3 of last year.

No Sir in terms of tariff I am asking . The tariff that we charge at Rs.40 per certificate given that the prices have come off significantly is there any risk to that Rs.40 or no risk to that Rs.40?

Let me tell you one thing, we were charging the same tariff when the REC rate for the solar was 2,500 also . So the exchange fee is same . It is not price sensitive because if it is kept price sensitive then we will always like to have higher price which is not in the interest of consumers. That is a fixed fee.

Right Sir perfect. Thank you so much.

Thank you very much. As there are no further questions, I would now like to hand the conference over to management for closing comments.

Thank you friends . I would like to thank each one of you for being part of today's call . Throughout the quarter we witnessed a number of efforts announced by the government and regulators, aimed at establishing a favorable policy and regulatory climate to develop the energy sector . We remain committed to contributing to the development of a sustainable and efficient energy future. Have a wonderful evening. Thank you very much.

On behalf of Axis Capital Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.