IEX Limited

“Transforming Energy Exchange in India”

Rating : Hold I Oct 11, 2021
Indian Energy Exchange “IEX” is the first and largest energy exchange in India providing a
nationwide, automated trading platform for physical delivery of electricity though an
efficient price discovery mechanism. IEX enjoys monopoly status with market share>95%
Market Data Monopoly into Energy exchange market
CMP 790 IEX has a scalable business model. It has delivered an excellent track
M.Cap (in cr.) 23,546 record of increase in market share, EPS growing at CAGR of 26% over
last 10 years, debt free company, ROCE ~60% with a strong
PE (TTM) 99 institutions interest.

Pioneer into Gas exchange as well

Financial Data - FY21 (In Cr.)
IEX launched the first gas exchange in India on June 20 and this will
Revenue 341 be India’s first automated national-level trading platform for physical
delivery of natural gas. It is also working on modalities related to the
EBITDA 287
potential formation of a coal exchange.
PAT 234
A massive industry with a big opportunity
Networth 521
Current energy exchange in India is into nascent stage. GOI aims to
Debt - reach spot market share to 25% by the year 2024 provides
tremendous opportunity for growth.
GOI has outlaid major capex plan of INR 7.5 lakh crore to create
Key Ratios vibrant gas market which will direclty IEX as company enjoys
monopoly status
Sales 5Y CAGR 13%
PAT 5Y CAGR 16% Disrupted Technology
IEX is steadily investing in technology and deepening the power
Debt to Equity NA
market through new products such as Real-Time Market (RTM) IEX is
Cash conversion (4) Days expected to launch some new products like Long-Duration Contracts,
Cross Border Trade, Green TAM and DAM, Exchange-based ancillary
ROCE 60% market.

Risk Factor :
Shareholding (%) The implementation of the market coupling will enable the
Promoter - buyer/seller to match their order in competitive exchange as weill
and this would challenge the IEX’s domination in the segment
Institutions 62.2
Valuation
Public 37.8
IEX commands premium valuation of 60X FY23 EPS due to its
monopolistic status in a huge market. We believe these valuations
are sustainable with limited scope of PE rerating

Recommended By : Arpit Goel, SEBI RIA – INA100014055

 IEX Limited
“Transforming Energy Exchange in India”
Rating : Hold I Oct 11, 2021

Exhibit 1 : Price Performance trailing 12 months

Exhibit 2 : PE Ratio since listing

Recommended By : Arpit Goel, SEBI RIA – INA100014055

 IEX Limited
“Transforming Energy Exchange in India”
Rating : Hold I Oct 11, 2021

Research Methodology:

We work on the principles of HQRP "High Quality Right Price“

Our Investment style is Value & Momentum Investing

Our Research approach is Goal based, Techno-Funda & Top to Bottom approach

Theme • Identify emerging sector cycle for medium to long term perspective
Play

Screen- • Shortlist leaders and front runners

ing

Price • Analysing technical strength

Action

• Evaluation through stringent quantitative analysis and valuation

Evalua- benchmarking
tion

• Selection on the basis of businesss outlook, review of top analysts coverage

Selection & management guidance

Recommended By : Arpit Goel, SEBI RIA – INA100014055

Disclaimer & Disclosure

• We invested in IEX at a price of INR 645

• Recommendation note by Arpit Goel- SEBI Registered Investment Adviser having registration
number –INA100014055, inhouse RIA, ASB Equity Advisory Services
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