PXIL powers back into the black

Suresh P Iyengar Mumbai | Updated on October 24, 2019

Power Exchange India (PXIL), the electricity trading platform promoted by the National Stock Exchange and the National Commodity and Derivatives Exchange, has turned the corner, registering a profit of almost Rs 1 crore a month.

Stepping back strongly from the brink, the exchange has been able to successfully rollout its revival strategy under Prabhajit Kumar Sarkar, Managing Director and CEO.

In 2017, both NSE and NCDEX at an extraordinary general meeting (EGM), voted to shut down the then-loss-making PXIL. NSE-NCDEX collectively own 61 per cent stake in the exchange.

However, making a complete turnaround, PXIL registered a net profit of Rs 8 crore for the financial year ended March, 2019 against a loss of Rs 2 crore logged in the financial year 2016-17.

The exchange’s focus on the term-ahead contract and renewable energy certificate (REC) segments has enabled it to sustain its financial performance despite dominance by its rival Indian Energy Exchange (IEX).

PXIL had managed to corner a market share of 32 per cent in REC trade and 41 per cent in term-ahead trades. It has about 3,400 registered members and clients.

Sarkar said when the exchange had chalked out the turnaround strategy it did not have adequate cash to upgrade the software and make fresh investments.

It sought the help of NCDEX e-Markets, an NCDEX subsidiary, with which it signed a contract for three years to upgrade its software at a cost of Rs 15 crore.

The exchange charges a fee of 2 paise per unit of cleared volumes from both buyers and sellers and collects a fee of about Rs 1 lakh per client.

Other shareholders of PXIL include Tata Power, JSW Energy, Power Finance Corporation, Gujarat Urja Vikas Nigam and West Bengal State Electricity Distribution Company.

The exchange logs a daily turnover of 14.5 million units on term-ahead contract and two lakh renewable energy certificates in a month.

PXIL plans to re-launch ‘day-ahead spot’ contracts soon and is in talks with state utilities, as well as power generation and distribution companies to actively participate on the exchange. Currently, IEX controls about 99 per cent of the day-ahead spot market.

A day-ahead contract is a double-side closed auction in which both buyers and sellers quote their prices daily between 10 am and 12 noon for delivery the next day, depending upon the uniform price auction on 15-minute-time-slot basis.

Published on October 23, 2019

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