MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDIAN ECONOMIC REVIEW
The Indian economy maintained its strong growth momentum for the most part in FY26 despite the global economy passing through a phase of significant transition and uncertainty. In this global environment, India continued to stand out as one of the fastest-growing major economies in the world growing steadily by 7.7% in FY26. Indias impressive growth has been supported by robust private consumption, sustained government capital expenditure, a resilient financial sector, and the continued beneficial effect of income-tax and GST rationalisation introduced in the Union Budget 2025-26.
The country is steadily moving towards becoming a global economic powerhouse and continues to be on track to become a 5 trillion-dollar economy by FY30. While global economic uncertainty is expected to remain elevated in FY27 the RBI expects Indias GDP growth to average 6.6 per cent based on heightened risks of inflationary pressures, supply disruptions and slower global growth. On the domestic front, the Indian Meteorological Department (IMD) has forecast a below- normal South-West monsoon for 2026 at approximately 92% of the Long-Period Average (LPA), partly influenced by the development of El Nino conditions. This presents a headwind for the agricultural sector and rural consumption for FY27.
Expected GDP Growth
Quarter & Financial Year 2027 |
Estimated Growth (%) |
Q1 |
6.6 |
Q2 |
6.3 |
Q3 |
6.5 |
Q4 |
6.8 |
FY27 |
6.6 |
Source: RBI
INDIAS POWER SECTOR
Countrywide electricity demand in FY26 was 1,707 BUs, a marginal year-on-year increase of approximately 1%, reflecting a moderation in the pace of demand growth over FY25. The slowdown was primarily driven by an early onset of the Southwest monsoon in May 2025, which reduced cooling needs and agricultural pump usage, compressing cooling-degree days significantly. Nevertheless, Indias long-run power demand drivers of rising income levels, rapid urbanisation, government electrification initiatives, expanding manufacturing, and electric vehicle adoption remain firmly intact.
The power sector continued its rapid structural transformation in FY26 with record-breaking capacity addition. Indias total installed generation capacity reached 533 GW as on 31st March 2026, an addition of 58 GW in a single year, the highest- ever annual increment. Indias renewable installed capacity 40 Indian Energy Exchange Limited (excluding large hydro) crossed 230 GW, driven by record solar additions. A total of 55 GW of non-fossil capacity was added, the highest ever in a single year. Solar capacity surged to approximately 150 GW, while wind capacity rose to 57 GW. Total non-fossil capacity as on 31st March 2026 stood at 283 GW (including large hydro and nuclear).Renewables (including large hydro) now account for approximately 53% of total installed capacity, a milestone. During this fiscal, India achieved 50% non-fossil installed capacity nearly five years ahead of its 2030 target.
Renewable power generation during FY26 increased significantly as solar generation grew 24% year-on-year, and wind generation rose 28% over the same period. Coal-fired generation however, declined by approximately 3.2%, the first contraction in several years, reflecting the growing contribution of clean energy to the grid. Total power generation in FY26 reached 1,848 BUs compared with 1,842 BUs in FY25.
This fiscal also witnessed growing grid integration challenges including curtailment of power, underscoring the urgent need to expand transmission and storage infrastructure alongside renewable capacity. The intermittent nature of renewable sources continues to necessitate innovative storage solutions. Both the Government and the private sector are actively exploring pumped storage, battery energy storage systems (BESS), and green hydrogen as means to ensure grid stability and drive Indias energy transition. In parallel, India has been pursuing clean energy goals through flagship initiatives including the National Solar Mission, the Green Energy Corridor Project, and the National Green Hydrogen Mission. All these initiatives are aimed at Indias committment to curtail the emissions intensity of its GDP by 45% by 2030 (relative to 2005 levels) to restrict global warming to 1.5 degrees Celsius.
India aims to establish a Green Hydrogen production capacity of at least 5 million metric tonnes annually by 2030 and the government has already commissioned nearly 8,000 tonnes per annum of production capacity across facilities. The Nuclear Energy Mission, announced in FY26, adds nuclear power as a key pillar of Indias long-term energy security strategy, targeting 100 GW of nuclear capacity by 2047 through the newly enacted SHANTI Act, 2025. The PM Surya Ghar Yojana continued to accelerate rooftop solar adoption, with more than 3.3 million rooftop systems installed as of May 2026, adding over 12 GW of rooftop solar capacity.
ELECTRICITY VALUE CHAIN
The electricity value chain starts with electricity generation, using sources such as fossil fuels, renewables or nuclear energy. Generated power is then transmitted via high-voltage networks over long distances to substations and distributed to homes, businesses and industries through low-voltage networks. These components work together to ensure reliable and efficient energy delivery.
In India, rising power demand driven by population growth, evolving lifestyles and changing consumption patterns requires continuous investment in generation, transmission and distribution to ensure reliable and quality power supply. To cater to this consumption growth, under its Power for All initiative, the Government of India aims to deliver reliable 24x7 electricity supply at competitive rates to all consumers.
GENERATION
With energy shortages at the national level having reduced, reflecting the grids growing reliability, India in the post-Covid era has managed peak power demand consistently in excess of 240 GW. In FY26, peak demand touched 245 GW, slightly lower than the record 250 GW on an all-time basis reached in FY25, According to the CEA, Indias total power generation in FY26 reached 1,848 BUs, with 71% generated from thermal, 10% from hydro, 16% from renewables (excluding large hydro), and 3% from nuclear, respectively. Renewable energys share in total generation rose to 29.2% in FY26, up from approximately 17% in FY25 on an aggregate basis, highlighting the accelerating energy transition. In terms of capacity, total installed capacity in this fiscal stood at 533 GW with an incremental capacity of 58 GW which was majorly accounted for by 55 GW of nonfossil capacity addition. The share of non-fossil sources in total installed capacity now stands at 53% while coal-based capacity addition saw a structural decline to a share of 43%. The incremental capacity addition in the renewable space was led by additional solar capacity of 45 GW, wind capacity of 6.1 GW, large hydro capacity of 3.4 GW and nearly 1 GW of nuclear capacity.
TRANSMISSION
The nations regional grids remain seamlessly interconnected under the One Nation One Grid One Frequency framework. The inter-regional capacity has increased by more than 75% since 2014, reflecting sustained investment in grid infrastructure. This integrated system enables efficient electricity distribution across all regions, strengthening the reliability and resilience of the entire power network. As of March 31st, 2026, Indias interregional transmission capacity of the National Grid stood at over 120 GW, with transmission line length and transformation capacity continuing to expand significantly. Indias national transmission network has crossed a major milestone exceeding 5 lakh circuit kilometres (ckm) of transmission lines and reaching a total transformation capacity of 1,407 gigavolt amperes (GVA). By reinforcing both generation and networks simultaneously, India has laid the foundation for a power sector that can support growth not just today, but well into the future. The National Electricity Plan (2023-2032) for Central and State transmission systems has also been finalised to meet the projected peak demand by 2032 and involves an estimated investment of over Rs.9 lakh crore.
DISTRIBUTION
In FY23, the Ministry of Power introduced the Electricity (Late Payment Surcharge and Related Matters) Rules to bolster the financial viability of the power sector. These rules were subsequently amended in FY24 to address un-requisitioned surplus power. In FY25, the National Load Dispatch Centre (NLDC) revised the procedure to include State-owned generating stations, with mock runs for penalties on generators commencing from July 2025. In FY26, these rules became fully operational, further enhancing generator compliance, improving payment discipline and power market liquidity.
Over the past few years, the government has introduced key measures to strengthen power distribution:
• Revamped Distribution Sector Scheme (RDSS):
The implementation of RDSS has continued to incentivise utilities under the Rs.3 lakh crore scheme, targeting reduction of pan-India AT&C losses to 12-15% and the ACS-ARR gap to zero. The progress has been steady, with smart meter deployment reaching 22% of approved installations as of December 2025. Time-of-Day (ToD) tariffs were mandated for all non-agricultural users from April 2025, aligning consumption patterns with solar generation.
• Additional Borrowing Scheme: State Governments continue to access additional borrowings of up to 0.5% of GSDP conditioned on undertaking and sustaining power sector reforms to ensure financial viability of their Discoms.
• Prudential Lending Norms: Additional norms targeting financially stressed utilities remain in force. Discoms failing to meet defined improvement trajectories remain ineligible for borrowings from PFC and REC.
• Automatic Fuel Cost Pass Through: Several States have continued to employ automatic fuel and power purchase cost adjustment mechanisms, ensuring financial sustainability of Discoms.
• Integrated Discom Ratings: Earlier in March, the 14th Annual Integrated Rating and Ranking Report for 65 Discoms was released, evaluating their financial health, performance excellence and responsiveness to external factors. According to the report, 41 utilities were able to achieve reduction in AT&C losses. A total of 22 utilities recorded an improvement in their ratings, while 30 utilities maintained their existing ratings. AT&C losses reduced for 39 utilities in FY25, with 38 utilities achieving AT&C losses below 15%, reflecting enhanced operational efficiency. According to the report, at the national level, AT&C losses have declined from nearly 16.0% in FY24 to 15.0% in FY25.
Ratings |
State DISCOMS |
States |
A+ |
UGVCL, MGVCL, DGVCL, PGVCL, PSPCL, PVVNL, TCED, BEST, NDMC |
Gujarat, Punjab, Uttar Pradesh |
A |
NBPDCL, APDCL, DHBVNL, MPPaKVVC, CSPDCL, SBPDCL, UHBVNL, WBSEDCL |
Bihar, Assam, Haryana, Madhya Pradesh, Chhattisgarh, West Bengal |
B |
APCPDCL, KSEBL, UPCL, MESCOM, APSPDCL, HPSEBL, MePDCL, JDVVNL, APEPDCL |
Andhra Pradesh, Kerala, Uttarakhand, Karnataka, Himachal Pradesh, Meghalaya, Rajasthan |
B- |
MSPDCL, JVVNL, DVVNL, TNPDCL, KESCO, MVVNL, AVVNL, MPPoKVVCL, CHESCOM |
Manipur, Rajasthan, Uttar Pradesh, Tamil Nadu, Madhya Pradesh, Karnataka |
C |
PuVVNL, MPMKVVCL, HESCOM, GESCOM, MSEDCL, TSECL |
Uttar Pradesh, Madhya Pradesh, Karnataka, Maharashtra, Tripura |
C- |
BESCOM, TGSPDCL, JBVNL, TGNPDCL |
Karnataka, Telangana, Jharkhand |
Source: 14th Annual Integrated Rating and Ranking Report, PFC
14th Integrated Ratings of DISCOMS
ECONOMIC EXPANSION AND POWER MARKETS
Industrial Growth and Urbanisation
Industrial growth and urbanisation remain key elements in Indias economic development and ongoing power sector transformation. The Governments thrust on Atmanirbhar Bharat and policy measures to position India as the cornerstone of the China Plus One strategy for global businesses augmented exports and domestic productive capacities in FY26. This was despite global trade uncertainties. These policy measures continue to drive increased electricity demand from the manufacturing sectors.
India has achieved notable strides in urbanisation. It is projected that by 2030, over 40% of Indias population will be living in cities. Although these cities occupy only about 3% of the countrys total land area, they remarkably generate 60% of Indias GDP Indias rapid urbanisation is projected to significantly increase energy consumption. Further, expected electricity demand from the growth of AI and data centres is also factored into the planning process of the government as it reinforces long-term demand projections. This AI growth boom is driven by cloud adoption, data localization mandates, and localized Graphics Processing Unit (GPU) workloads. As per the Ministry of Power, electricity demand from data centres is estimated to touch nearly 14 GW by FY32. The strong growth in data centre demand is likely to trigger parallel demand for up to 50 GW of renewable energy. In the near term power demand is expected to touch almost 2,700 BUs with a peak demand of 388 GW by FY32.
Demand and Supply
According to the Central Electricity Authority (CEA), all India energy consumption reached approximately 1,707 Billion Units (BU) in FY26, representing a year-on-year growth of about 1.1% from 1,692 BU in FY25. The moderation in demand growth was primarily driven by an early onset of the monsoon in May 2025, which reduced cooling degree days by more than 7% compared to 2024, with a 12% decline in June alone, a month which typically accounts for about 15% of annual demand. The peak demand met during the summer in FY26 was 242 GW recorded in June 2025, while in June FY25 peak demand stood at 245 GW.
The Northern Region remained the largest contributor to demand, though due to weather related events growth rates varied significantly across regions in FY26. Key States such as Maharashtra, Gujarat, Tamil Nadu, Rajasthan and Uttar Pradesh recorded the highest peak demand levels.
Energy Met Comparison of Top States — FY25 vs FY26
State |
FY25 (BU) | FY26 (BU) | % Change |
Maharashtra |
201 | 202 | 1% |
Uttar Pradesh |
164 | 163 | -1% |
Gujarat |
152 | 157 | 3% |
Tamil Nadu |
130 | 132 | 2% |
Rajasthan |
113 | 111 | -2% |
Karnataka |
92 | 96 | 4% |
Telangana |
88 | 90 | 2% |
Andhra Pradesh |
80.2 | 79.0 | -1.4% |
Punjab |
69.5 | 77.5 | 11.4% |
West Bengal |
67.5 | 71.1 | 5.3% |
All India |
1,692.0 | 1,707.0 | 1.0% |
Source: CEA. |
Short-Term Electricity Market
According to the Central Electricity Regulatory Commission (CERC), Indias short-term power market volumes stood at approximately 302 BU in FY26 compared with 238 BU in FY25. Short term transactions accounted for 13% of total generation of 1,848 BU. The short-term market itself has grown at a CAGR of 8.9% from FY10 to FY25.
Within the short-term market, power exchanges remained the dominant segment, facilitating 60% of short-term transactions, while bilateral transactions, including trades through energy traders and direct agreements between distribution companies contributed 26% to the market share. The Deviation Settlement Mechanism (DSM) accounted for 13%. This steady expansion of the short-term electricity market underscores the growing reliance on dynamic and competitive electricity procurement methods to meet rising energy demands and enhance market efficiency.
OUTLOOK
In FY26, India demonstrated remarkable resilience in navigating a complex global environment characterised by geopolitical tensions, evolving trade policies, and climate-linked demand volatility. Indias strong macroeconomic fundamentals, robust private consumption, fiscal consolidation, and sustained public capex continue to underpin healthy power demand growth over the medium term. With India firmly on its trajectory to remain the worlds fastest-growing major economy, the power market is well-positioned to capitalise on annual incremental demand of nearly 100 BUs projected through 2030.
The accelerating shift towards renewables, rising need for market-based storage dispatch supported by the governments push on addition of BESS and PSP introduction of newer market mechanisms, the structural load shifts in agriculture, and expansion of open access participation provide sustained growth levers for power market development.
BUSINESS REVIEW - FINANCIAL YEAR 2026
ELECTRICITY SEGMENT
In FY26, IEX achieved its highest-ever electricity traded volume of 141 BU, a 17% year-on-year increase over nearly 121 BUs traded in FY25. This performance was driven by strong growth in the Real-Time Market and the Green Market, even as national power demand growth moderated. Several factors contributed to this increase:
• Weather Variability: The arrival of early and prolonged monsoons moderated power demand. The Indian Metrological Department reported 8% higher rainfall during this fiscals monsoon, the highest rainfall in five years, which helped support higher hydro generation.
• Record Renewable Generation: Solar generation rose 24% on a year-on-year basis and wind generation rose 28% YoY in FY26, providing abundant supply, particularly during solar hours.
• Higher Supply Liquidity: Enhanced wind, hydro, and solar generation alongside sustained coal-based supply resulted in sell-side liquidity which was higher by nearly 50% on a year-on-year basis on the exchange platform, and consequently deepend market participation.
• Decline in Electricity Prices: The Market Clearing Price in the Day-Ahead Market fell to Rs.3.86/unit in FY26, lower by 14% YoY from Rs.4.47/unit in FY25, while the Real-Time Market price declined to Rs.3.59/unit to be lower by 16% YoY from Rs.4.28/unit. These prices encouraged greater market participation.
• Optimisation by DISCOMs and Open Access (OA) Consumers: DISCOMs and OA consumers continued to strategically optimise power procurement, taking advantage of competitive exchange prices.
Day-Ahead Market
In FY26, a total of 62.8 billion Units (BU) were traded in the Day- Ahead Market (DAM, including HP-DAM), an increase of 2.4% over FY25. DAM accounted for approximately 44% of total electricity volumes on IEX. The average daily volume traded in DAM was approximately 172 MU.
Real-Time Market
The Real-Time Market (RTM) was the standout performer
In FY26, trading 54.9 BUs, a 41% year-on-year increase and accounting for approximately 39% of total electricity volumes traded on IEX. The daily average volume in this segment was approximately 150 MU. This segment was also witness to a strong last quarter with volumes of 14.3 BU, a rise of 48.2% year-on-year, reflecting the growing preference for flexible, real-time electricity procurement.
Term-Ahead Market
The Day-Ahead Contingency and Term-Ahead Market (TAM), comprising HP-TAM, contingency, daily, weekly, and monthly contracts up to 3 months, traded 12.7 BUs in FY26, an increase of 8.0% year-on-year. TAM accounted for approximately 9% of total electricity volumes. The Longer Duration Contract (LDC) continues to serve as a flexible alternative to traditional procurement platforms, offering buyers the ability to procure power for up to 90 days. IEX has also filed a petition with the Honble CERC seeking extension of delivery duration of the contracts from 90 days to 11 months and continues to await regulatory approval.
Green Market
The Green Market, comprising the Green Day-Ahead Market (G-DAM) and the Green Term-Ahead Market (G-TAM), achieved 10.8 BUs of volumes in FY26, an increase of 23% on a year- on-year basis. The average price in G-DAM for FY26 was Rs.4.36/unit, a decline of 10.6% compared with FY25, reflecting improved renewable supply liquidity. The share of Green Market volumes accounted for nearly 8% of total electricity traded on IEX.
IEX Electricity Volume Summary - FY25 vs FY26
Market Segment |
FY25 (BU) | FY26 (BU) | % Change YoY |
Day-Ahead Market (DAM, incl. HPDAM) |
61 | 63 | +2% |
Real-Time Market (RTM) |
39 | 55 | +41% |
Term-Ahead Market (TAM, incl. DAC) |
12 | 13 | +8% |
Green Market (G-DAM + G-TAM) |
9 | 11 | +23% |
Total Electricity Traded |
121 | 141 | +17% |
Source: IEX. Note: Total may not match sum of segments due to rounding and adjustments.
CERTIFICATE SEGMENT
Renewable Energy Certificate (REC)
The Central Electricity Regulatory Commission (CERC) REC Regulations 2022, which went into effect from December 5th, 2022 and were fully implemented in FY24, continued to govern the REC market. The regulations permit RECs to be perpetually valid (till sold), with no floor or forbearance price, and introduced technology multipliers (Wind & Solar - 1; Hydro - 1.5; Municipal Waste - 2; Biomass & Biofuel - 2.5). RECs are traded on exchanges twice a month, providing consumers competitive rates.
CERC has directed GRID-India to review trends in REC transactions and propose measures for further increasing auction frequency beyond the current twice-a-month schedule, with stakeholder consultations ongoing. REC fungibility and elimination of the floor price have enhanced market liquidity, with REC inventory levels close to 3.9 crore certificates at the close of FY26.
Trading volumes of RECs remained strong in FY26 with a total of 187.20 lakh (18.72 million) RECs traded, representing nearly 18.72 BUs of electricity, higher by 5% on a year-on-year basis. As with other segments on the exchange, the last quarter ended very strong and saw 71.71 lakh RECs being traded. This marked the highest-ever annual REC trading volume on IEX, reflecting the growing significance of RECs in promoting renewable energy adoption and ensuring efficient market participation.
Energy Saving Certificates (ESCerts)
The Perform, Achieve and Trade (PAT) mechanism, a market- based tool introduced by the Indian Government, aims to enhance energy efficiency in energy-intensive industries. Designated Consumers (DCs) assigned targets are rewarded with Energy Saving Certificates (ESCerts) for surpassing them or required to purchase certificates if they fall short.
In FY26, ESCerts were at a major juncture as India prepares to transition the high greenhouse gas-intensive sectors from the Perform, Achieve and Trade (PAT) scheme into the new Carbon Credit Trading Scheme (CCTS).
KEY FOCUS AREAS
CORE BUSINESS GROWTH
Indian Energy Exchange (IEX) has been actively working to deepen and diversify the short-term power market while expanding its share within this segment. Over the years, IEX has continuously enhanced market flexibility by introducing innovative products and extending contract tenures to better meet the evolving requirements of market participants. To further strengthen the market and provide participants with greater flexibility in procurement and portfolio management, IEX has filed petitions with the Honble CERC seeking approvals on new segments that would deepen power markets and strengthen the foundation for sustainable growth and innovation. Through continuous market development, product innovation, and the introduction of new market mechanisms. IEX aims to create a more robust, efficient, and future-ready electricity market ecosystem. The following areas serve as the cornerstone of our vision and drive our core business growth:
• Power Procurement Optimisation by Discoms
With over 90 distribution companies currently registered, IEX works closely with these utilities to reduce their power procurement expenses by leveraging cost-competitive merit order scheduling. The exchange assists utilities in both short-term bilateral contracts and long-term Power Purchase Agreements (PPAs) by identifying opportunities to replace expensive power with more affordable alternatives available on its platform. This strategy enables distribution companies to realize substantial cost savings. Furthermore, IEX actively supports these utilities through ongoing capacity-building and educational programs, ensuring they are well-equipped to maximize the value and efficiency of their power procurement activities.
• Growing Open Access Procurement
Electricity remains one of the most significant cost components for industries. In energy-intensive sectors such as cement, metals, automobiles, chemicals and paper, power procurement can account for nearly 50% of operating costs. Power exchanges provide open-access consumers with the flexibility to supplement their power requirements based on prevailing market conditions. Transparent price discovery and a range of short-duration products allow consumers to align procurement decisions with production schedules, demand patterns and generation availability. Over 5,900 commercial and industrial consumers across India utilise IEXs platform to procure competitively priced power. These prices provided an opportunity for open-access consumers to optimize their power procurement costs throughout the year in FY26, rather than being solely dependent on discom procurement. It also provided an opportunity to replace costlier power from captive generation with more competitively priced power available through the exchange.
Reflecting this growing value proposition, participation by open-access consumers on power exchanges has increased significantly, with traded volumes growing by over 50% year-on-year Several States are also encouraging renewable energy procurement through Green Markets on power exchanges supported policies that provide exemptions from additional surcharge. The Ministry of Power over the last few years has introduced significant amendments to Electricity Rules, enabling large industrial users to establish their own transmission lines and grid connections without requiring a license. To further promote open access, IEX actively engages with potential consumers, raises awareness and advocates for policy and regulatory reforms at both the Central and State levels. Our efforts aim to address systemic challenges and remove tariff and non-tariff barriers, ensuring seamless access to competitive power procurement.
New Market Products and Segments
a) Green Real Time Market (G-RTM) and TAM-11 Month:
As part of our strategy to deepen and diversify the short-term power market, IEX has filed petitions with the Honble CERC for the introduction of the Green Real-Time Market (G-RTM) and the extension of Term-Ahead Market (TAM) contracts from the current 90 days to up to 11 months. While G-RTM will enable efficient real-time trading of renewable energy through Green-tagged contracts, supporting renewable integration and grid balancing, the proposed extension of TAM contracts will provide market participants greater flexibility, planning certainty, and procurement options. Together, these initiatives are aimed at enhancing market efficiency, expanding customer choice, and supporting Indias evolving power sector requirements. We continue to await approval from the CERC on both these petitions.
b) Peaking Power Contracts: To address the growing requirement for reliable and flexible power during peak demand hours, IEX is working towards the introduction of Peaking Power Contracts in the short-term market and has filed a petition with the Honble CERC. The order with regards the petition has been reserved. These contracts are expected to provide market participants with a dedicated mechanism to procure electricity specifically during peak consumption periods, thereby helping discoms and consumers manage demand fluctuations more effectively. The proposed market segment would support development of merchant storage capacity and thereby enhance grid reliability, improve resource optimization, and provide efficient price discovery for peak-hour power requirements. With increasing variability in demand patterns and renewable energy generation, Peaking Power Contracts will serve as an important market-based solution for ensuring adequate power availability during critical periods while supporting the continued evolution of Indias competitive power market.
South Asian Cross-Border Market
South Asian countries have been actively participating in Cross-Border Electricity Trade (CBET) for more than a decade, primarily through bilateral arrangements. In April 2021, IEX introduced CBET on its exchange platform, enabling cross-border entities to participate initially in the Day-Ahead Market (DAM). Subsequently, in FY24, the Central Electricity Authority (CEA) granted a No Objection Certificate (NOC), allowing these entities to also access the Real-Time Market (RTM).
Through CBET, IEX facilitates electricity trade with Nepal and Bhutan. For FY26, 4.9 BUs of buy and sell volume in Cross Border electricity was traded through IEX, compared with 4.2 BUs of buy and sell in FY25. As more neighbouring countries engage in CBET, the South Asian power market is likely to experience increased cross-border electricity trade, benefiting from demand and generation complementarities. These complementarities are being cemented in agreements with Nepal wherein 500MW capacity from the Himalayan neighbour has been granted approval for sale of power to India. Similarly, the Government of India has agreed to assist the Royal Government of Bhutan in developing 10,000 MW of hydropower and import surplus electricity to India. With Sri Lanka, there are ongoing discussions on transmission interconnection of up to 1,000 MW which further highlight opportunities for regional energy integration and cross-border power trade.
By increasing our share within the short-term market as well as enabling an expansion of the short-term market, IEX will witness significant core business growth.
NEW OPPORTUNITIES
Battery Energy Storage Systems
Battery Energy Storage Systems (BESS) remain a cornerstone of Indias clean energy transition, enabling seamless integration of renewable power into the national grid. In FY24, the Ministry of Power introduced the Viability Gap Funding (VGF) mechanism to catalyse 4,000 MWh of BESS capacity, which was later expanded to 13,200 GWh in response to falling costs. Building on the success of Tranche I, the Ministry of Power launched VGF Tranche II with a target of 30,000 MWh, marking a significant scale up. By March FY26, tenders totalling 43,000 MWh had been floated, with nearly 40,000 MWh successfully awarded and the rest were in the tendering process stage. The pace of tender clearances has emerged as a clear reflection of strong policy execution and growing market confidence. BESS plays a dual role in the evolving energy landscape by storing surplus solar generation during solar hours (day-time) and dispatching electricity during evening peaks, while also stabilizing the grid during periods of high renewable penetration. One of the key operational models under consideration is the charge and discharge through power exchanges, where current prices range between Rs.2.0- Rs.2.5 per unit during solar hours and Rs.5-7 per unit in the evening, offering a compelling arbitrage opportunity for BESS operators. For an ISTS connected BESS project for 2-hrs BESS including ISTS losses and Round-trip efficiency (RtE), the annual arbitrage is around Rs.4.81/unit (with 545 annual cycles) and for a 4-hrs BESS project the annual arbitrage is around Rs.3.91/unit (with 484 annual cycles). With falling discovered tariffs, expectations of further cost reductions, and expanding participation in ancillary services, BESS has firmly established itself as a commercially viable and strategically essential component of Indias energy ecosystem.
Market-based Models
Deepening Indias green power markets is essential to reduce cost of renewable energy integration and generating efficient price signals that can guide new capacity addition. IEX continues to advocate for greater market-based participation in green power trading, including recommending 10-15% of power from all new RE projects awarded by REIAs and DISCOMs to be mandatorily channelled through the green market segments of power exchanges, a measure that would materially enhance liquidity and price transparency.
In a significant structural development in FY26, CERC approved IEXs proposal to revamp its Green Contracts framework, replacing the earlier Solar, Non-Solar, and Hydro classifications with four new categories - Wind, Hydro, Distributed Renewable Energy (DRE), and Other RE which are in alignment with the Ministry of Powers revised Renewable Consumption Obligation (RCO) notification of September 2025. The revised framework applies across IEXs full suite of green market products, including the Green Day Ahead Market (G-DAM), Green Day Ahead Contingency (G-DAC), Green Intra-Day Contracts, and Green Daily, Weekly, and Monthly Contracts, in effect, strengthening the alignment between exchange-traded green power and Indias evolving clean energy compliance architecture.
With regards Virtual Power Purchase Agreement (VPPA), FY26 marked a landmark regulatory milestone. CERC finalised the VPPA Guidelines through a notification dated December 24, 2025, published in the Gazette on January 28, 2026, providing a structured and legally certain pathway for designated consumers and corporates to procure renewable energy attributes without the need for physical power delivery. Under this framework, the renewable energy generator sells power independently on exchanges such as IEX, while the difference between the market-discovered price and the pre-agreed reference price is settled bilaterally with Renewable Energy Certificates (RECs) transferred to the consumer to enable Renewable Consumption Obligation (RCO) compliance.
These guidelines mark a significant milestone in Indias journey towards energy transition, providing a credible and structured instrument for corporates to meet their green procurement goals. The VPPA model is posed to gain significant traction among Commercial & Industrial (C&I) consumers as corporates accelerate their decarbonisation commitments while retaining operational flexibility in power scheduling. Beyond compliance, VPPAs are increasingly being recognised as an effective longterm price hedging instrument for C&I customers, offering revenue certainty to RE developers while insulating buyers from market price volatility.
As a fillip to the Contract for Difference (CfD) model, the Ministry of New and Renewable Energy of India (MNRE) has approved a 500 MW pilot CfD for RE on a 3-hour basis to be implemented by Solar Energy Corporation of India (SECI). This pilot shall enable RE generators to sell electricity on power exchanges, while SECI settles the difference between the discovered strike price and the reference market price. The pilot would supply 1,500
MWh of RE power daily for 3 non-solar hours with settlements based on DAM prices and backed by a CfD Stabilisation Fund of INR 76 crore provided by the Government. The pilot has demonstrated strong interest from commercial and industrial (C&I) consumers.
Peer-to-Peer Trading
The PM Surya Ghar: Muft Bijli Yojana - the worlds largest domestic rooftop solar initiative has provided significant impetus to the growth of distributed energy resources and the emergence of local energy markets, including Peer-to- Peer (P2P) electricity trading. As of March 2026, the scheme has benefited over 32 lakh households through rooftop solar installations and lifted cumulative RTS capacity to 25.7 GW, a 51% increase on a year on year basis, with more than 63 lakh applications received on the scheme portal and disbursal of Rs.14,771 crore through Central Financial Assistance. With rooftop solar capacity scaling rapidly, the energy ecosystem is at an inflection point, necessitating a gradual transition from subsidy-driven mechanisms such as Net Metering towards a more dynamic, market-based framework such as P2P trading that better reflect the true value of distributed generation.
P2P electricity trading has been gaining traction globally, driven by the proliferation of prosumers-households and entities that both generate and consume energy. India is witnessing encouraging momentum on this front. In February 2026, REC Limited, the nodal agency for the India Energy Stack under the Ministry of Power showcased the first-ever live demonstration of a peer-to-peer decentralised energy transaction under the India Energy Stack (IES) framework, underscoring the Governments commitment to enabling technology-driven local energy markets. Under the India Energy Stack, consumers generating renewable energy through rooftop solar systems will be able to trade surplus electricity with other users, including across State borders, operating on a secure, trust-based digital framework to ensure transactions are verifiable and scalable.
The P2P initiative is currently being positioned as a policy sandbox, with its immediate objective being digital validation in terms of testing identity management, smart meter data exchange, interoperable APIs, price discovery tools, billing integration, and settlement systems within a controlled environment. The pilot focuses primarily on rooftop solar prosumers which includes residential, commercial, and institutional consumers equipped with smart meters at distribution voltage levels.
States such as Karnataka, Uttar Pradesh, and Delhi have taken the lead in issuing guidelines and regulations to govern and promote P2P trading, while others such as Assam and Odisha are advancing regulatory frameworks to support decentralized energy markets. As rooftop solar capacities continue to scale under the PM Surya Ghar scheme, it is expected that more States will progressively establish enabling regulatory frameworks, paving the way for a vibrant, decentralised energy market ecosystem in India.
Carbon Market
The Carbon Credit Trading Scheme (CCTS) has undergone significant evolution, emerging as the mainstay of Indias market-based climate action framework. Following its 2023 amendment to include the Offset Mechanism, the scheme now encompasses both obligated entities with binding targets and non-obligated entities that may voluntarily participate by purchasing Carbon Credit Certificates (CCCs) to fulfil their sustainability commitments.
The CCTS operates as an intensity-based baseline-and-credit system, with targets defined as tonnes of CO2 equivalent per unit of product output. Entities that outperform their assigned targets will be eligible to earn CCCs, which can be traded on power exchanges. Conversely, entities falling short of their targets will be required to purchase and surrender equivalent CCCs to achieve compliance. The scheme is jointly administered by the Ministry of Power, MoEFCC, and the Bureau of Energy Efficiency (BEE), with the Central Electricity Regulatory Commission (CERC) providing regulatory oversight.
In January 2026, emission-intensity targets were notified for seven energy-intensive sectors - Aluminium, Cement, Chlor-Alkali, Pulp & Paper, Petroleum Refining, Petrochemicals, and Textiles -covering approximately 490 entities with legally binding obligations for FY26 and FY27, using FY24 as the baseline year. The baseline emission-intensity target for FY24 was 480.25 tCO2e per tonne of equivalent product, while the cumulative emission target for FY26 was reduced to 476.57 tCO2e per tonne, reflecting Indias progressive decarbonization trajectory.
Offsets are generated through accredited renewable energy, energy efficiency, and afforestation projects, validated under the supervision of the Bureau of Energy Efficiency (BEE) and aligned with Article 6.4 of the Paris Agreement. Under the offset mechanism BEE has approved 10 sectors and 12 methodologies for buying and selling CCCs on power exchanges which will increase the trading of such CCCs.
With the first compliance period now underway, obligated entities were required to submit their action plans to BEE by April 2026, followed by verified MRV reporting for FY26 by July 2026. CCC trading on the designated exchange is expected to formally open by October 2026, marking the beginning of active price discovery in Indias carbon market.
Coal Exchange
Under the Mines and Minerals (Development and Regulation), Amendment Act 2025, the Ministry of Coal has proposed to establish Coal Exchange (s) under the aforesaid enabling provisions of Coal Exchange Rules, 2025. As per these rules, the Coal Controller Organisation (CCO) shall act as the Regulator for Coal Exchanges.
IEX has been actively collaborating with the Ministry of Coal to support the establishment of a Coal Trading Exchange (CTE)
in India. In alignment with the Governments long term vision of achieving 1.5 billion tonnes of coal production and opening 100 new mines by 2030, the proposed exchange will transform the coal market by introducing a transparent, competitive, and technology driven trading mechanism.
The Coal Trading Exchange is envisaged to shift Indias coal sales model from the current "one to many" structure to a "many to many" platform, allowing both buyers and sellers to participate simultaneously. This will facilitate efficient price discovery, improve coal availability, and reduce reliance on international benchmarks for domestic coal pricing.
With additional mine auctions underway and several new mines expected to commence production in FY26, the Coal Trading Exchange is anticipated to be operational in FY27, marking a paradigm shift in Indias coal sector and reinforcing the governments commitment to market-based reforms.
In view of this opportunity, IEX has also registered a wholly owned subsidiary "Indian Coal Exchange Limited" with the Ministry of Corporate affairs for setting up a coal exchange in India.
Mineral Exchange
Further, pursuant to the amendment of the MMDR Act in August
2025 and notification of the Draft Mineral Exchange Rules,
2026 by the Ministry of Mines, IEX is evaluating the feasibility of establishing a Minerals Exchange.
ICX
In FY25 lEXs wholly owned subsidiary ICX Private Limited (formerly known as International Carbon Exchange Private Limited) became accredited as Indias first International Renewable Energy Certificate (I-REC) issuer. ICX has since emerged as a crucial enabler for corporates seeking to credibly demonstrate their renewable energy usage in line with international standards. In FY26, a total of 1.79 crore I-RECs were issued by ICX over 614 devices that have been registered and represent more than 9 GW (9,289 MW) of clean energy capacity. I-REC is a globally recognized digital certificate that serves as transferable proof of generation of 1 MWh of energy from renewable sources.
Indias market for International Renewable Energy Certificates (I-RECs) has witnessed significant growth in recent years, reflecting the increasing emphasis on renewable energy attribute and sustainability reporting among businesses. During FY26, the redemption of 1.51 crore I-RECs underscored the strong and growing corporate demand for credible renewable energy attributes. Corporate demand for I-RECs in India is being fuelled particularly by export-oriented and multinational companies seeking to demonstrate renewable electricity consumption across their operations and supply chains. Market participants have consistently highlighted robust procurement activity from such corporates, reflecting the increasing importance of renewable energy attribute tracking in meeting net-zero and ESG objectives. As demand for transparent and internationally recognized renewable energy claims continues to rise, the I-REC market is poised for sustained growth.
POLICY AND REGULATORY INITIATIVES
In FY26, Indias power sector continued to make strong progress across generation, transmission, and distribution, reflecting the countrys sustained focus on energy security, consumer-centric reforms, and infrastructure expansion. These efforts have played a vital role in strengthening the availability of reliable, affordable, and cleaner power, while supporting economic growth and the nations evolving energy transition goals.
IMPROVING FINANCIAL HEALTH OF DISCOMS
During the year, focused initiatives were undertaken to reinforce the financial viability of DISCOMs, enabling them to effectively meet the countrys rising power demand. Parallel efforts were made to accelerate renewable energy capacity addition, facilitate its offtake and its seamless integration with the grid, and modernize grid standards in line with emerging technologies and evolving needs of the power sector.
Smart Pre-paid Meters, Feeder Separation and Other Measures: With an aim to improve operational efficiencies and financial sustainability of Discoms, nearly 19.8 Cr. prepaid Smart meters, 52.5 lakh DT (Distribution Transmission) meters and about 2.1 lakh Feeder meters were sanctioned at a cost of Rs.1.3 lakh Cr. Loss Reduction works of Rs.1.5 lakh Cr. were sanctioned and Rs.38,187 Cr. have been released under the Revamped Distribution Sector Scheme (RDSS). As on December 31st 2025, 3.76 Cr. consumer meters, 12.56 lakh DT meters and 1.58 lakh feeder meters have been installed under RDSS. As a result of reform measures taken under the scheme, AT&C losses came down to around 16.16% and ACS-ARR gap has reduced to around 0.11/kWh in FY25 from 21.91% and from 0.69/kWh respectively in FY21.
1. The Governments continued thrust on smart prepaid metering, feeder segregation, timely payment discipline in the power sector, renewable energy capacity addition and grid integration through diversified bidding mechanisms, energy efficiency measures, e-mobility solutions, and power market reforms sustained the sectors growth momentum during FY26. Policy support during the year also continued to strengthen the EV ecosystem and promote wider adoption of clean mobility solutions across the country.
2. The momentum to build distribution level solar capacity has been reinforced further in the Union Budget for FY27, which significantly stepped-up support for clean energy transition. Allocation for the Ministry of New and Renewable Energy was increased to Rs.32,914 crore, while the allocation for PM Surya Ghar: Muft Bijli Yojana was enhanced to 22,000 crore, up from 20,000 crore in the Union Budget for FY26, reflecting the Governments continued emphasis on expanding rooftop solar access and accelerating household-level clean energy adoption.
The Union Budget for FY27 also introduced enabling measures for the broader clean energy ecosystem, including customs duty exemptions for capital goods used in manufacturing lithium-ion cells for Battery Energy Storage Systems (BESS) and exemption of basic customs duty on sodium antimonate used in solar glass manufacturing. These measures are expected to support domestic manufacturing, improve supply-chain resilience, and facilitate greater renewable energy integration.
In addition, the Budget maintained the long-term thrust on nuclear energy as a strategic pillar of Indias energy transition, while also emphasizing the need for stronger grid infrastructure, storage, and clean technology manufacturing to support the countrys evolving power system requirements.
The various policy initiatives taken by Government of India during this financial year are briefly discussed below:
AUGMENTATION OF DEMAND
The flagship schemes of the Ministry of Power such as Integrated Power Development Scheme (IPDS), Ujjwal DISCOM Assurance Yojana (UDAY), Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Saubhagya, UJALA and Urban Jyoti Abhiyan (URJA) achieved substantial progress this fiscal in providing reliable, affordable and quality electricity supply to citizens of the country.
A total of 18,374 villages were electrified under the DDUGJY scheme and 2.86 crore households were electrified under the SAUBHAGYA scheme. Several components of these schemes got subsumed under the RDSS scheme approved by Ministry of Power in July 2021.
Funds under RDSS are to be released based on financial performance and viability demonstration by the distribution companies. The objective is to assist distribution companies in infrastructure development, feeder separation, smart meter installation, etc. This is expected to improve sustainability of financially ailing distribution utilities by achieving reduction in Aggregate Technical and Commercial (AT&C) losses at pan India levels to 12-15% and reduction of ACS-ARR gap to zero.
The reform measures undertaken to reduce AT&C losses and ACS-ARR gap are likely to result in increased capacity of distribution companies to cater to consumer demand.
STRENGTHENING THE TRANSMISSION INFRASTRUCTURE
Govt. of India has finalised the National Electricity Plan from 2023 to 2032 for Central and State transmission systems. The total cost of the plan is Rs.9.16 lakh Cr. Under the previous plan 2017-22, about 17,700 circuit kilometres (ckm) lines and 73 GigaVolt Ampere (GVA) transformation capacity were added annually. Under the new plan, transmission network in the country will be expanded from 5.08 lakh ckm at the end of March 31st, 2026 to 6.48 lakh ckm in 2032. During the same period the transformation capacity is likely to increase from 1,398 GVA to 2,345 GVA. Inter-Regional transfer capacity is expected to increase from 120 GW to 168 GW. This plan covers the network of transmission lines of 220 kV and above.
By November 2025, renewable energy-linked interstate transmission projects totalling 25.8 GW, with an investment of Rs.38,849 crore were approved to connect 280 GW of Variable Renewable Energy (VRE) to the Inter-State Transmission System (ISTS) by 2030. About 335 GW of transmission network would be required for this, out of which 48 GW has already been completed, 172 GW is under construction, and 18.5 GW is under bidding. The balance 96.5 GW are to be approved in due course.
During 2025, 6,51 1 ckm of transmission lines (of 220 kV & above), 1,00,368 MVA of transformation capacity (of 220 kV & above) and 1,600 MW of Interregional Transfer Capacity have been added.
The above efforts are expected to help meet increasing electricity demand, facilitate RE integration and green hydrogen loads into the grid. Further, these would also provide transmission service providers the vision of growth opportunity available in the transmission sector.
STREAMLINING PAYMENT MECHANISM FOR DISTRIBUTION COMPANIES
To promote payment discipline across the power sector value chain, which had long been a concern due to mounting receivables of generating companies and other entities, Central Government notified the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 on 3rd June 2022. Since its implementation, significant progress has been achieved, chiefly, a 96% reduction in outstanding dues to generating companies, down from Rs.1,39,947 crore in 2022 to just Rs.3,330 crore by March 2026 - while also bringing down Distribution utility payment cycles from 178 days in FY21 to 113 days in FY25. Consequently, Discoms are now largely paying their current dues on time, reflecting a marked improvement in financial discipline. The countrys power distribution utilities (DISCOMs and power departments) have collectively recorded a positive Profit After Tax (PAT) of around Rs.2,701 crore in FY25, marking a significant turning point for the sector. Ministry of
Power notified an amendment to the Electricity (Late Payment Surcharge and Related Matters) Rules on May 2nd, 2025, bringing intra- state transmission licensees under the payment security mechanism prescribed in the Rules. This inclusion will help ensure timely payments and enhance payment security for intra-state transmission licensees, thereby attracting critical investments for strengthening intra-state transmission networks. This is vital for evacuating power from planned renewable generation capacity expansion.
MEASURES TAKEN TO EFFECTIVELY MEET THE ELECTRICITY DEMAND OF CONSUMERS
India successfully met the maximum power demand of 245 GW during FY26. Due to significant additions in generation and transmission capacities, energy shortages at the national level reduced to 0.03% during the financial year. The per capita electricity consumption in India surged to 1,460 kWh in FY25 and the average availability of electricity in rural areas has increased to 22.6 hours, while urban areas saw up to 23.4 hours of power supply.
As of March 31, 2026, Indias total installed power generation capacity stood at 533 GW. Generation Capacity witnessed an incremental 58 GW of capacity across thermal and renewable sources. Renewable energy accounted for more than 50% of total installed capacity at 275 GW, making India the third largest in terms of renewable capacity globally. To meet projected electricity demand of Indias rapidly expanding economy, the CEA estimates that nearly 41 GW of thermal capacity is under construction. A further 22.4 GW of capacity has been awarded for construction and 16.4 GW is under various stages of planning. With regards coal stock in the country, as of March 2026, power plants held nearly 77.5 MT of coal for an inventory of 25 days on average. Sustained coal supply during the first two quarters of FY26 ensured that peak summer demand of 242.5 GW was met in June 2025. With improved domestic coal availability, the Ministry of Power discontinued its advisory for blending imported coal.
The Cabinet Committee on Economic Affairs approved the Revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for Coal Allocation to Power Sector in May 2025, streamlining coal linkage mechanisms for the power sector. With the introduction of Revised SHAKTI Policy, existing eight Paras of the SHAKTI Policy (for coal allocation), have been mapped to only two windows, thereby enhancing coal accessibility, operational flexibility, and competition. It ensures optimal utilization of thermal capacity, promotes affordable power, reduces import dependency, and strengthens Indias energy security.
India has the potential of 280 GW of PSPs with a little over 7 GW developed so far. The Government has set an ambitious target of adding 44 GW PSP capacity by FY32 out of which, 13 GW is under construction and rest is under development the stage. Further, under the Viability Gap Funding (VGF) Schemes for development of BESS, the plan is for additional capacity of 43,220 MWh.
LAYING DOWN THE FRAMEWORK FOR A CARBON MARKET
The Ministry of Power announced an amendment to the Energy Conservation Act 2001 in FY23, which introduced definitions for Carbon Credit Certificates and the Carbon Credit Trading Scheme (CCTS). This amendment facilitated the creation of a Carbon Market.
In June 2023, the Ministry released the CCTS, establishing the regulatory framework for the Indian Carbon Market (ICM) with the Bureau of Energy Efficiency (BEE) as the administrator. The primary goal of the ICM is to reduce greenhouse gas emissions in India.
In December 2023, amendments were made to the CCTS. The revision enabled India to have its own standards for carbon trading and also permitted non-obligated entities to generate carbon credits.
During the year, CERC issued the final CERC (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024 to create a framework for the exchange of Carbon Credit Certificates for Obligated and Non-Obligated entities on Power Exchanges. The scheme stipulates that carbon credits will be traded on power exchanges, with the CERC overseeing the trading of carbon credits in India. Further, in 2025 the Ministry of Environment, Forest and Climate Change issued final notifications on Greenhouse Gas Emission Intensity (GEI) targets for seven sectors - aluminium, chlor-alkali, cement, pulp and paper, petrochemicals, petroleum, and textiles. These sectors account for about 16% of Indias GHG emissions with a combined baseline of 480 million tonnes CO-equivalent in FY24, targeted to decline to 465.3 million tonnes by FY27. Under the offset mechanism, nine methodologies and detailed procedures have been published by the Bureau of Energy Efficiency in consultation with Grid India. It is expected that the trading of certificates of mandatory sectors and voluntary sectors would be operationalised in calendar year 2026.
FACILITATING OPEN ACCESS
The Electricity Rules, 2005 were amended in 2024 to rationalise open access charges. In an effort to reduce Open Access charges, these Rules provide that additional surcharge shall not be applicable for Open Access Consumers to the extent of contract demand being maintained with the distribution licensees and consumers who have never bought electricity from their distribution licensees are not required to pay additional surcharge. Implementation of these rules on ground are expected to improve competitiveness of industries.
Further, open access reforms were proposed under the Draft National Electricity Policy (NEP), 2026 and the Draft Electricity (Amendment) Bill, 2025 to deepen competition, reduce the cost burden on industry, and facilitate more efficient use of network infrastructure. The Draft NEP 2026 envisages seamless open access and captive procurement for commercial and industrial consumers and progressive reduction of cross-subsidies and surcharges. Complementing this, the Draft Electricity (Amendment) Bill, 2025 proposes to enable supply through shared distribution systems, strengthen non-discriminatory access to existing distribution networks, and exempt distribution licensees from the universal service obligation for consumers eligible for open access, subject to a regulatory framework. Together, these proposed reforms are aimed at improving consumer choice, enhancing industrial competitiveness, lowering system costs, and accelerating transition towards a more flexible and market-oriented power sector.
DEEPENING THE ELECTRICITY MARKET
The government has been working to bring in alternative mechanisms to make existing long-term contracts more flexible. The objective is to enhance liquidity in the shortterm market through increased participation from distribution utilities and generation companies. The Ministry of Power issued a revised Draft National Electricity Policy in FY26, along with the Draft Electricity (Amendment) Bill with the objective of development of an efficient market as one of its key objectives.
Following stakeholder consultations, the Draft National Electricity Policy (NEP), 2026 places a strong emphasis on deepening and modernising power markets to enhance competition, efficiency, and flexibility. The draft policy envisages a progressive increase in procurement of electricity through competitive power markets, including short term, term ahead and emerging market mechanisms, alongside time bound introduction of capacity markets to ensure long term resource adequacy. It also supports greater participation of thermal generation in markets through assured coal availability and increased market based scheduling. For renewable energy development, the Draft NEP 2026 emphasises strict enforcement and fungibility of Renewable Purchase Obligations (RPOs), expanded use of market based instruments for RE procurement, aggregation of small and distributed renewable capacities, and enhanced participation of storage linked and firm renewable power in electricity markets. Complementing this, the Draft Electricity (Amendment) Bill, 2025 proposes reforms to facilitate non discriminatory access to distribution networks, enable supply through shared distribution systems, and strengthen the role of competitive markets in power procurement, thereby accelerating transition towards a more market oriented electricity sector.
In July 2025, India marked a major milestone in electricity market development with the introduction of electricity futures contracts on the Indian stock and commodity exchanges, facilitating risk management and price hedging capabilities for market participants. These futures contracts are likely to help power generators, DISCOMs, large industrial users, and market intermediaries to hedge against price volatility and lock in electricity costs ahead of delivery in the market.
RENEWABLE ENERGY PROMOTION, GREEN ENERGY CORRIDOR AND GRID INTEGRATION THROUGH ADEQUATE CAPACITY CREATION
India recorded strong progress in clean energy expansion during the year with non-fossil sources crossing 50% of the countrys cumulative installed power capacity ahead of target.
Towards commitments for RE based energy transition of the country and that of net zero by 2070, the Government has made enhanced efforts to meet these goals. Projects are being developed under the Green Energy Open Access (GEOA) Rules and related State regulations. The Government of India approved the scheme of "Modification of the Scheme on Budgetary Support for the Cost of Enabling Infrastructure for HEPs (Hydro Electric Power Stations) with a total outlay of 12,461 Cr. for the period FY25 to FY32. A cumulative hydro capacity of approximately 31 GW, including 15 GW of Pumped Storage Project (PSP) capacity, would be supported under the scheme. The Government has set an ambitious target of adding 35 GW PSP (Pump Starage Project) capacity by 203132.
Government of India notified the Renewable Consumption Obligation (RCO) targets for designated consumers up to March 2030 under the Energy Conservation Act, 2001. The minimum share of renewable energy is set to progressively increase over the years. From 29.9% of the total energy in FY25 energy from renewable sources is expected to gradually rise to 43.3% in FY30. The notification also includes a provision for RCO buyout by the obligated entities that are not able to comply with their targets. RCO also includes specified quantum of consumption from Decentralized Renewable Energy sources.
Under the Green Energy Corridor projects, the Intra-State Green Energy Corridor with a target capacity of 9,700 circuit kilometres (km) transmission lines and 22,600 MVA capacity sub-stations is currently under various stages of completion. The Intra-State Green Energy Corridor- Phase II scheme intends to create intrastate transmission infrastructure required for RE power evacuation of projects of approximately 20 GW capacity across seven implementing States of Gujarat, Himachal Pradesh, Karnataka, Kerala, Rajasthan, Tamil Nadu and Uttar Pradesh. The scheme aims for addition of 10,753 circuit kilometres (ckm) of transmission lines and 27,546 Mega Volt-Amperes (MVA) capacity of substations over a period of 5 years - FY22 to FY26.
Around 12 GW of Hydro Electric Projects are under construction. Further, 4 GW Projects are under various stage of planning and targeted to be completed by 2031-32. Nuclear Capacity of 6.6 GW is under construction and targeted to be completed by FY30, while 7 GW of Nuclear Capacity is under various stages of planning and approval. Around 157 GW of RE including 67 GW of Solar, 6.5 GW of Wind and 60 GW Hybrid power is also under construction.
In energy storage systems, nearly 12GW/69 GWh Pumped Storage Projects (PSPs) and around 9 GW/ 26 GWh Battery Energy Storage System (BESS) capacity are under construction.
The Transmission System Plan prepared by the committee set up by the Ministry of Power has identified major upcoming non- fossil based generation centers in the country. With the planned transmission system, the inter-regional capacity will increase to about 1.50 lakhs MW by 2030 from 1.12 lakhs MW at present.
OTHER KEY INTERVENTIONS
The Green Hydrogen Policy, 2022 aims to facilitate setting up of and procurement of RE power by Green Hydrogen/ Ammonia manufacturers through suitable measures of open access, banking and other concessions. This is likely to help in meeting the target of production of 5 million tons of Green Hydrogen by 2030 and the related development of RE capacity. The Green Hydrogen standard for India was notified on 19th August, 2023, outlining the emission thresholds to be met in order for hydrogen produced to be classified as Green, i.e., from renewable sources.
Under the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme implementation, as of May 2025, 19 companies have been allocated a cumulative annual production capacity of 8.62 lakh tonnes of Green Hydrogen every year and 15 firms have been awarded a 3,000 MW annual electrolyzer manufacturing capacity.
Launched in April 2025, the Green Hydrogen Certification Scheme of India (GHCI) provides a national framework to certify hydrogen as "green" by assessing its greenhouse gas emissions across the entire production cycle. The scheme ensures that only hydrogen produced using renewable energy, and within the prescribed emission limits, can be officially labelled as Green Hydrogen. It provides transparency, traceability, and credibility for producers, buyers, and export markets.
Under the GHCI, obtaining a Final Certificate is mandatory for any green hydrogen production facility in India that (a) receives subsidies or incentives from the Central or State Governments, or (b) sells or uses the hydrogen domestically (in India). The Bureau of Energy Efficiency (BEE) is the Nodal Authority responsible for accrediting agencies that monitor and certify projects.
Under the Production Linked Incentive (PLI) Scheme, MNRE on September 30, 2022, issued Scheme Guidelines for implementation of the Production Linked Incentive Scheme (Tranche-II) on National Programme on High Efficiency Solar PV Modules, with an outlay of Rs.19,500 Cr. In June 2025, Indias PV capacity reached 3.3 gigawatts (GW) polysilicon, 5.3 GW wafer, 29 GW cell, and 120 GW module, with the PLI scheme driving all upstream capacity.
MARKET COUPLING
CERC vide its order dated 06 February 2024, directed Grid India to carry out pilot study to assess the impact of market coupling. As per the Grid India report, increase in economic surplus was 0.3% which is insignificant. Based on the submissions made by Grid-India, CERC, vide its order dated 23 July 2025, decided to initiate the process for implementing market coupling of the Day-Ahead Market (DAM) and directed staff of commission to frame procedure and regulation for the implementation of same.
As per the order, with respect to the Real-Time Market (RTM), given the shorter time for bid submission and running the market clearing engine, the decision to implement the coupling of Real-Time Market (RTM) of the power exchanges shall be considered at a later stage after gaining operational experience from the coupling of DAM. Additionally, the feasibility of coupling the Term-Ahead Market (including Contingency Contracts) of the power exchanges shall be examined through a shadow pilot.
The CERC Order of July 2025 was challenged before the Appellate Tribunal of Electricity (APTEL) by IEX on various points of its legality, transparency and on merits. In February 2026, APTEL dismissed the Appeal citing IEX is not a "person aggrieved" at this stage since market coupling to be implemented through regulations to be notified separately by CERC and the CERC Order of July 2025 is merely "administrative" and "tentative". APTEL further preserved IEX rights to appeal on merits after framing of the regulations by CERC.
Subsequently, IEX filed a Civil Appeal with stay application in Supreme Court against the APTEL judgement on 10th April 2026.
On 17th April 2026, CERC issued a draft amendment to PMR 2021 for implementation of market coupling with Grid-India as the MCO. Public hearings on the draft regulations concluded on 10th June 2026.
REGULATORY INITIATIVES: CENTRE
Over the last three years, CERC has implemented various regulations such as CERC (Deviation Settlement Mechanism and Related Matters) Regulations 2024; Amendments to CERC (Connectivity and General Network Access to the inter-State Transmission System) Regulations 2022; CERC (Indian Electricity Grid Code) Regulations, 2023 (IEGC); and CERC (Sharing of ISTS Charges and Losses) Regulations. All these regulations and their amendments have led to further strengthening of the power market.
During FY26, the CERC undertook a wide range of significant regulatory actions spanning tariff determination, power market development, grid discipline, carbon credit trading, and renewable energy certificates, reflecting its continued commitment to modernising Indias electricity sector framework.
CERC issued a draft notification proposing the Terms and Conditions of Tariff (Second Amendment) Regulations, 2025, aimed at integrating provisions for energy storage systems- especially Integrated Energy Storage Systems (IESS)- colocated with coal, lignite, gas-based generating stations, or inter-state transmission systems. The draft formally recognises storage as a regulated asset within both generating stations and the inter-state transmission system, placing it on the same regulatory footing as generation and transmission assets. Separately, CERC notified the Sharing of Inter-State Transmission Charges and Losses (Fourth Amendment) Regulations, 2025, the last of which introduced key changes to align the inter-state transmission charging framework with the evolving grid and renewable energy dynamics.
CERC released the draft Power Market (First Amendment) Regulations, 2025, aimed at deepening market liquidity, improving operational flexibility, and enabling more efficient power trading. Key changes include the formal recognition of Virtual Power Purchase Agreements (VPPAs) as a financial contracting mechanism for renewable energy. Complementing this, CERC notified the VPPA Guidelines, establishing a formal regulatory framework to facilitate financial contracts for renewable energy procurement without physical delivery.
CERC issued the Deviation Settlement Mechanism and Related Matters (Second Amendment) Regulations, 2025, introducing key revisions primarily focused on the charges associated with injecting infirm power into the grid. The amendment stipulated that no payment will be made for any infirm power injection when the system frequency exceeds 50.05 Hz, aimed at maintaining grid discipline and system frequency stability.
CERC also notified the REC (First Amendment) Regulations, 2026, introducing technology-specific certificate multipliers, formal recognition of VPPAs within the REC framework, and revised timelines for REC applications. It also clarified that renewable energy projects set up for self-consumption will now be eligible for RECs, even if they do not qualify as captive generating plants, expected to encourage commercial and industrial players to monetise the environmental attributes of their own green power.
REGULATORY INITIATIVES: STATES
In FY26, State Electricity Regulatory Commissions (SERC) of Union Territories, Uttarakhand, Jharkhand and Karnataka amended RPO regulations to align with MoPs revised trajectory. The SERCs of Union Territories (UTs), Delhi, Haryana and Himachal Pradesh also issued the Green Energy Open Access regulations. The SERCs of Haryana, Punjab, Maharashtra, Meghalaya, Madhya Pradesh, Jharkhand and Assam also issued the Resource Adequacy Regulations and the SERCs of Uttar Pradesh, Tamil Nadu and Odisha issued draft regulations thereof.
POWER MARKETS: KEY DRIVERS FOR GROWTH
Amidst the need to take steps towards energy transition and energy security, peak demand of the country continued its climb, while national energy shortages were simultaneously reduced to a mere 0.03%- a testament to both growing demand and improved supply-side preparedness. These milestones serve as a clear indicator of the strong power demand trajectory expected in the years ahead. As per the Short-Term National Resource Adequacy Plan (ST-NRAP) for FY26 published by GRID India, the findings emphasise the importance of flexible and dispatchable resources, particularly Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSP), to manage the increasing variability associated with renewable energy sources. The timely commissioning of envisaged capacity additions along with optimisation of planned outages, is identified as a critical strategy to mitigate supply shortfalls.
While trade and tariff actions of governments worldwide have resulted in some form of disruptions in the functioning of electricity markets, the policy and regulatory initiatives undertaken in India during FY26 have greatly strengthened the foundations for broadening and deepening of the power market. Regulatory milestones during the year- including CERCs draft Power Market (First Amendment) Regulations, 2025 formally recognising VPPAs, the framework for Carbon Credit Certificate trading, and amendments to the REC regulations - are expected to further increase participation and liquidity on exchange platforms. Introduction of new procurement models such as Firm and Dispatchable Renewable Energy (FDRE), Round- the-Clock (RTC) renewables, peak power supply tenders, solar-plus-BESS, and standalone BESS tenders continued to evolve during the year, with price discovery across multiple configurations, thereby expanding the range of products available to distribution companies and other buyers. For DISCOMs, it remains all the more important to have a balanced mix of capacity- combining firm thermal, flexible hydro, storage, and market-sourced power- to efficiently manage both peak obligations and the energy transition imperative.
Key Developments Expected in the Power Market :
The CEA resource adequacy guidelines and subsequent methodologies issued during the year highlight the need for expeditious introduction of a capacity market to enable adequate capacity in the system.
The first Carbon Credit Certificate (CCC) trading under Indias Carbon Credit Trading Scheme is expected to be launched by October 2026, operationalising the regulatory framework notified by CERC earlier in the year and opening a new compliance-driven market segment on power exchanges. The proposed introduction of Peak DAM and Peak RTM segments on power exchanges, aimed at enabling dedicated trading during peak hours particularly in late evenings, is also expected to deepen liquidity for flexible resources such as BESS and PSP. Additionally, electricity derivatives began trading on financial exchanges from July 2025, and their broader adoption in FY27 is expected to provide market participants with effective price hedging tools and reduce procurement cost volatility. The proposed introduction of a Green RTM segment, which will enable real-time trading of renewable energy, is also expected to ensure better balancing of variable generation with demand and accelerate clean energy integration into the grid. Taken together, these developments signal a decisive shift toward a more unified, transparent, and deeper power market - one that is increasingly capable of supporting Indias dual imperatives of energy security and energy transition.
Additionally, the National Electricity Policy 2026 is likely to bring wide-ranging reforms across planning, tariffs, markets, generation, grids, and technology, with its core vision of ensuring reliable, affordable 24x7 electricity through a financially viable and environmentally sustainable power sector. Provisions such as automatic annual tariff revisions, a gradual shift towards recovering fixed costs through demand charges, and exemptions from cross-subsidy surcharges for manufacturing units, railways and metro systems to improve industrial competitiveness, can help the market. NEP also targets an increase in per capita electricity consumption from 1,460 kWh in 2024-25 to 2,000 kWh by 2030 and over 4,000 kWh by 2047, aligning with Indias Viksit Bharat vision.
Alongside the NEP the draft Electricity (Amendment) Bill, 2025 which considers revisions made after extensive consultations, is expected to be introduced in Parliament during FY27. The Bill proposes the introduction of distribution sub-licensing or multiple supply licensees, allowing more than one company to operate in the same area using a common distribution network, with the stated aim of introducing competition in retail power supply, improving service quality and reducing losses. It also proposes empowering CERC to introduce market-based instruments to attract investment and speed up renewable energy capacity addition toward the 500 GW target by 2030. Further, it introduces enforceable non-fossil energy obligations to align the Electricity Act with the Energy Conservation Act.
Regulatory Framework by State Commissions for Power Procurement Cost Optimisation
The short-term market provides distribution utilities an option to hold a mix of long-term and short-term contracts and optimise their power purchase-related costs. Power exchanges not only provide efficient price discovery but also the flexibility to distribution utilities to buy or sell depending upon their requirement. Several State Electricity Regulatory Commissions (SERCs) have formalised the process of purchase/sale by distribution companies and incorporated the provision of market purchase in the relevant regulations/guidelines. More SERCs are considering the same in view of competitiveness of market rates. During the year, SERCs have also started to align their Grid Codes with the IEGC to allow discoms a longer timeframe for exercising their right to revise schedule. This allows the discoms to optimize their costs through purchase/ sale in RTM.
RISKS AND COMPLIANCES
Several risks can impact the achievement of IEXs business objectives. Being present in a competitive and regulated environment, IEX is exposed to various risks such as financial, regulatory, information technology, cyber security, legal and market risk, among others. Our focused risk management approach seeks to minimise the adverse impact of these risks on our business and enables us to leverage market opportunities. Our well-defined enterprise risk management framework provides long-term competitive advantage through an established process involving risk identification, assessment, mitigation, measurement, monitoring and reporting which leads to transparent, smooth and seamless functioning. The risk management framework adopted by the Company is guided by ISO 31000:2018 Risk Management Guidelines.
The focus of the risk management framework is primarily to mitigate perceived risks in the current structure of market dynamics that may affect the business.
IEX HAS CLASSIFIED FOUR TYPES OF MAJOR RISKS:
Regulatory Risks: These are risks which arise out of policy and regulatory changes related to the functioning of the power market and competitive landscape which can affect the longterm functioning of the exchange and has an impact on the transaction volumes at the exchange.
Strategic Risks: These are risks which are internal or external in nature and are mostly related to the changing market scenario and developments in the value chain of generation, transmission & distribution, entry of new players, technological disruptions, etc. that may disrupt the strategic decisions taken to meet the objectives.
Operational Risks: These are risks which arise due to internal factors that can have a direct or indirect effect on internal policies, business processes, systems and our people in support functions, and thereby have the potential to impact our core business and values. Operational risks are mainly related to regulatory compliances as per Central Electricity Regulatory Commissions Power Market Regulations and relevant orders, and risks related to finance, market operations etc., which may include the following:
• Technology related risk such as software failures, system downtime, or inadequate IT infrastructure.
• Market risk arising out of trading activities.
• Investment related risks such as fall in the value of investments, concentration of investment portfolio etc.
• Credit risk covering margin account maintenance leading to payment, security management and collateral management.
• Sustainability Risks (specifically Environmental Social and Governance (ESG) risks).
Cyber Security Risks: These are risks which are related to exposure or loss of data resulting from a cyber-attack or data breach on the organisation. It involves identifying potential threats and vulnerabilities in your organisations digital systems and networks. The risk is not only about the likelihood of a cyberattack but also the potential consequences, such as financial loss, reputational damage, or operational disruption.
REGULATORY RISKS
Power markets are continuously evolving with several new policies and regulations notified from time to time to make the market deeper, more participative and transparent. The Central Electricity Regulatory Commission has implemented various regulations namely, Grid Code, GNA Regulation, Transmission Sharing Regulations, Ancillary Regulations, DSM Regulations etc. which have a bearing on the functioning of the power market. One of the key regulatory aspects which has direct bearing on the Exchange is Market Coupling.
CERC vide its order dated 06 February 2024, directed Grid India to carry out pilot study to assess the impact of market coupling. As per the Grid India report, increase in economic surplus was 0.3% which is insignificant. Based on the submissions made by Grid-India, CERC, vide its order dated 23 July 2025, decided to initiate the process for implementing market coupling of the Day-Ahead Market (DAM) and directed staff of commission to frame procedure and regulation for the implementation of same.
As per the order, with respect to the Real-Time Market (RTM), given the shorter time for bid submission and running the market clearing engine, the decision to implement the coupling of Real-Time Market (RTM) of the power exchanges shall be considered at a later stage after gaining operational experience from the coupling of DAM. Additionally, the feasibility of coupling the Term-Ahead Market (including Contingency Contracts) of the power exchanges shall be examined through a shadow pilot.
IEX challenged the July 2025 Order before the Appellate Tribunal for Electricity (APTEL) on 28 August 2025. Subsequently, in its Order dated 13 February 2026, APTEL mentioned that as market coupling cannot be implemented without regulations, IEX was not an aggrieved party at that stage. As per the order, as and when final regulations are issued and if IEX is aggrieved by them, they have the liberty to challenge the regulations before an appropriate forum including all grounds raised in the appeal filed before APTEL. Subsequently, on April 10,2026, IEX filed an appeal against the APTEL order in the Supreme Court, and the hearing is scheduled for August 03, 2026.
On 17 April 2026, CERC issued the Draft Market Coupling Regulations. Final regulations are yet to be issued.
Mitigation: The Day-Ahead Market (DAM) contributed 39% of IEXs total traded volumes in FY26, compared with 44% in FY25 and nearly 95% in FY15, reflecting the growing contribution of other market segments to the overall product mix.
To prepare for the eventual implementation of market coupling regulations, IEX has been proactively strengthening its operational, technology and financial resilience. The Company continues to focus on deeper customer integration, technology- led customisation, efficient fund management and product innovation to enhance operational efficiency and customer experience.
Building on the success of API-based bidding, IEX introduced the Backoffice API, providing seamless access to post-trade reports such as delivery schedules and financial obligation reports. Nearly 72% of the cleared volume in I-DAM are contributed by members using APIs. The Company remains focused on expanding API functionalities to enable greater automation, faster response to market dynamics and deeper integration with customers systems.
Leveraging nearly two decades of customer relationships, the Business Development team continues to work closely with market participants through workshops and advisory support, enabling them to optimise power procurement strategies and maximise value from exchange-based trading. Integration of front-end trading, back-office reporting and customer SAP systems, together with data analytics-led bidding tools and a unified margining framework, further enhances operational efficiency and the overall trading experience.
With increasing electrification, improving supply liquidity, new market models, supportive policy initiatives and ongoing diversification efforts, IEX remains well positioned to capitalise on the significant growth opportunities in the Indian power market and deliver sustainable long-term value for stakeholders. We believe that the impact of market coupling would be minimal.
STRATEGIC RISK
The government, in its various vision documents, has emphasised the need for a deeper and transparent power market in India. Being a regulated organisation with rules, bye laws, business rules and circulars approved by the Central Electricity Regulatory Commission, IEX functions within the ambit of provisions and remains on top of all the compliances. The Company is also regulated by various regulations under the Electricity Act 2003 such as Power Market Regulations, Inter-State Open Access (OA) Regulations and Procedure for Scheduling of Collective Transactions issued by POSOCO, etc. Any deviation from any of the provisions under these regulations would be of significant risk to IEX.
Mitigation: The Enterprise Risk Management Committee meetings are held on a half yearly basis, where regulatory, strategic, operational and technology & cybersecurity risks are presented along with mitigation measures. Also, from the regulatory perspective, both the Market Surveillance Committee and the Risk Assessment and Management Committee are constituted as mandated by the Central Electricity Regulatory Commission. The committee meetings are held as per timelines fixed by the Central Electricity Regulatory Commission with reports submitted to the regulator at regular intervals. The State level regulations are governed by State Electricity Regulatory Commissions. The Company also proactively engages in regular policy advocacy with the Central Electricity Regulatory Commission, State Electricity Regulatory Commissions, Ministry of Power and other industry bodies for any change in regulation that may adversely affect its business.
OPERATIONAL RISK
Operational risks have the potential to affect the regular business operations of the Company. This may include factors such as margin maintenance, access to trading data, sufficient bank balance in settlement account for meeting the requirement of executing trades, etc.
Mitigation: Mitigation measures include regular surveillance of the trading mechanism and reporting any error to the Central Electricity Regulatory Commission at periodic intervals.
Moreover, the Company is ISO 9001:2015 certified with definitive Standard Operating Procedures in place.
TECHNOLOGY RISK
The introduction of various new products with stringent timelines has increased dependency on the use of latest technologies and systems and any occurrence of issues/ failures in the system may result in disruption of trading which could affect the companys business and eventually its reputation.
Mitigation: Our Companys cutting-edge technology serves many participants in a competitive market scenario. The Company is also ISO 27001:2022 certified for information security and its related benchmarks which ensures adoption of appropriate policy-procedures and adherence of global standard security practices in the organisation. The Company has a Business Continuity Plan and a disaster recovery site in Mumbai to quickly recover and restore its technology infrastructure and business operations when its primary data centre (New Delhi) becomes unavailable.
CYBER SECURITY RISK
Cyber Security is increasingly becoming critical, with new threats constantly emerging that seek to exploit any vulnerabilities in the exchanges systems. For IEX, that provides an online trading platform, cyber security is of paramount importance for ensuring trust among market participants, regulators and stakeholders.
Mitigation: IEX is continuously monitoring, evaluating and implementing various security controls in the form of best-inclass tools and technologies, processes aligned with global standards such as ISO 27001:2022 and imparting regular awareness to the staff for protection, early identification, detection, quick response and recovery in case of any type of cyberattacks. Constant enhancement and continuous improvement in the Cyber Security Framework and Information Security Management System has been our Companys top priority. To minimise the operational and financial impacts on the Company, a Cyber Security Policy with Cyber Crisis Management Plan has been formulated to ensure a high degree of security and operational reliability by having a Readiness, Response and Recovery mechanism for cyber security events which could impact critical business activities.
LEGAL RISK
Legal risk consists of non-compliance of various kinds such as membership criteria fulfilment, incorrect member enrolment, non-compliance to tax or accounting compliances, an entity with a criminal background, change in the net worth profile of members, etc.
Mitigation: The mitigation measures include regular surveillance of the trading mechanism and reporting any error to the Central Electricity Regulatory Commission at periodic intervals. Moreover, the Company is ISO 9001:2015 certified with definitive Standard Operating Procedures in place.
MARKET RISK
The Companys revenues could be adversely affected if its market share does not grow year-on-year and the company does not put efforts to bring products commensurate with the changing market requirements.
Mitigation: Revenues of IEX are majorly derived from transaction fees and annual subscription fees. The Company systematically engages with all the stakeholders in an attempt to increase the participant base and driving revenue growth. Over time the Company has taken many initiatives towards enhancing customer centricity and customer loyalty through several projects. Also, the Company is in regular discussion with policy makers and stakeholders towards creation of new market-friendly products.
FINANCIAL PERFORMANCE
KEY PERFORMANCE METRICS:
Particulars |
Standalone |
Consolidated |
||||
| 2025-26 | 2024-25 G | Growth % | 2025-26 | 2024-25 | Growth % | |
Revenue from operation |
60,838.57 | 53,537.01 | 13.64 | 61,564.70 | 53,726.23 | 14.59 |
Treasury Income |
13,655.1 1 | 11,892.43 | 14.82 | 13,130.47 | 12,010.46 | 9.33 |
Total Revenue |
74,493.68 | 65,429.44 | 13.85 | 74,695.17 | 65,736.69 | 13.63 |
Operating Cost |
8,511.46 | 7,184.92 | 18.46 | 8,613.53 | 7,517.56 | 14.58 |
CSR Expenses |
945.00 | 841.84 | 12.25 | 945.00 | 841.84 | 12.25 |
Finance Cost, Depreciation and Amortization |
2,556.66 | 2,381.68 | 7.35 | 2,559.85 | 2,386.84 | 7.25 |
Total Expenses |
12,013.12 | 10,408.44 | 15.42 | 12,118.38 | 10,746.24 | 12.77 |
Profit before share of profit of associates, exceptional items and tax |
62,480.56 | 55,021.00 | 13.56 | 62,576.79 | 54,990.45 | 13.80 |
Share in profit of associate |
- | - | - | 1,979.53 | 1,463.15 | 35.29 |
PBT |
62,480.56 | 55,021.00 | 13.56 | 64,556.32 | 56,453.6 | 14.35 |
PAT |
47,370.79 | 41,464.82 | 14.24 | 49,292.12 | 42,916.91 | 14.85 |
Profit for the year attributable to: |
||||||
Shareholders of the Company |
47,370.79 | 41,464.82 | 14.24 | 49,292.12 | 42,916.91 | 14.85 |
Non-controlling interests |
- | - | - | - | - | - |
PAT Margin |
63.59% | 63.37% | 0.22 bps | 65.99% | 65.29% | 0.70 bps |
Earnings per share () Basic |
5.33 | 4.66 | 14.38 | 5.54 | 4.83 | 14.70 |
PROFIT AND LOSS STATEMENT ANALYSIS (STANDALONE)
REVENUE
The Company derives its revenues from transaction fees, annual subscription fees, admission fees, interest income, gains on sale of investments and other miscellaneous income.
During FY26, the total revenue of the Company stood at Rs.74,493.68 lakh as compared to Rs.65,429.44 lakh in the previous year. The operating revenue increased from Rs.53,537.01 lakh in FY25 to Rs.60,838.57 lakh in FY26, at the rate of 13.64%. The increase was mainly due to growth in electricity traded volume by 16.90 % from 121 BU in FY25 to 141 BU in FY26. Treasury and other income of the Company stood at Rs.13,655.11 lakh as compared to Rs.11,892.43 lakh during the previous year, with a growth rate of 14.82% which was mainly due to increase in average investment from 1,363 cores in FY25 to 1,595 crores in FY26. The Company maintained its leadership position during the financial year with profit after tax (PAT) of Rs.47,370.79 lakh as compared to Rs.41,464.82 lakh in FY25.
EXPENSES
The expenses of the Company primarily comprise employee cost, operating and other expenses, CSR, interest and depreciation/amortization charges as detailed below:
| (Rs.in lakhs) | |||
Particulars |
FY26 | FY25 | Growth % |
Employee benefit |
4,814.20 | 4,497.17 | 7.05 |
Technology expenses |
1,365.46 | 1,061.84 | 28.59 |
Other operating expenses |
2,331.80 | 1,625.91 | 43.42 |
Total Operating Cost |
8,511.46 | 7,184.92 | 18.46 |
CSR |
945.00 | 841.84 | 12.25 |
Finance cost |
228.32 | 261.68 | -12.75 |
Depreciation and amortization |
2,328.34 | 2,120.00 | 9.83 |
Total expenditure |
12,013.12 | 10,408.44 | 15.42 |
DETAIL ANALYSIS OF OPERATING EXPENSES IS AS BELOW:
Employee benefit cost included employee CTC and other related expenses. It increased on overall level mainly on account of annual increments.
Technology expenses increase by 28.59% i.e. from Rs.1,061.84 lakh in FY25 to Rs.1,365.46 lakh in FY26 mainly due to software licenses, AMCs, security tools and data center operations etc.
Other operating expenses increased by 43.42% from Rs.1,625.91 lakh in FY25 to Rs.2,331.80 lakh in FY26, mainly due to increase in legal & professional related expenses from Rs.628.88 lakh in FY25 to Rs.1,210.26 lakh in FY26. Legal & Professional related expenses were mainly incurred for business consultancy, Audit Fee, Listing related fee, legal & advisory service and other associated professional services etc. Other expenses were in line with the previous year.
CSR EXPENSES
The Company incurred Rs.945.00 lakh (previous year Rs.841.84 lakh) towards corporate social responsibility required pursuant to Section 135 of the Companies Act, 2013 against the obligation of Rs.945 lakh (previous year Rs.841.84 lakh).
For details, please refer Annexure 1 of the Directors Report.
FINANCE COST
The finance cost decreased from 261.68 lakh in FY25 to 228.32 lakh in FY26 mainly due to decrease in interest on lease liability.
PROVISION FOR TAXATION
The total income tax (provision) increased from Rs.13,556.18 lakh in FY25 to Rs.15,109.77 lakh majorly due to increase in profits in FY26. Effective tax rate in FY26 is at 24.18% as compared with 24.64% in FY25.
EARNINGS PER SHARE
Basic and Diluted earnings per share (EPS) of the Company increased by 14.38% to Rs.5.33 for FY26 against Rs.4.66 in FY25.
SHAREHOLDERS FUNDS
SHARE CAPITAL
As on March 31,2026, the paid up share capital of the Company stood at Rs.8,916.93 lakh (89,16,92,735 equity shares of Rs.1 each (Previous year Rs.8,916.93 lakh i.e., 89,16,92,735 equity shares of Rs.1 each). The Companys share capital, net of equity shares held by the IEX ESOP Trust increased to Rs.8,908.95 lakh in FY26 as compared to Rs.8,908.78 lakh in FY25 on account of ESOP exercised by employees during the year.
OTHER EQUITY
The Companys other equity as on March 31, 2026, was Rs.1,21,763.80 lakh in comparison to Rs.1,00,865.32 lakh as on March 31,2025.
During FY26 26,750.78 (Final dividend for FY25 13,375.39 lakh; Interim dividend for FY26 Rs.13,375.39 lakh) [previous year 26,750.79 lakh (Final dividend for FY24 Rs.13,375.40 lakh; Interim dividend for FY25 Rs.13,375.39 lakh)] was utilised from free reserves of the Company towards payment of dividend on Equity shares
The Company net worth stood at Rs.1,30,672.75 lakh as on March 31.2026, as against Rs.1,09,774.10 lakh as on March 31,2025.
For more details refer Note 18 of Standalone Financial Statements.
TRADE PAYABLE
The Companys trade payable is at Rs.411.10 lakh as on March 31.2026, as against Rs.333.22 lakh as on March 31,2025.
LEASE LIABILITIES
Lease Liabilities balance (Non-current and current) is at Rs.1,115.59 lakh as on March 31,2026, as against Rs.615.47 lakh as on March 31,2025. The increase is mainly due to recognition of the remaining lease term for the Noida office.
OTHER FINANCIAL LIABILITIES
The Companys other financial liabilities balance (Non-current and Current) is Rs.97,681.28 lakh as on March 31, 2026, as against Rs.97,063.26 lakh as on March 31,2025.
OTHER LIABILITIES
The Companys other liabilities balance (Non-current and Current) is at Rs.2,813.24 lakh as on March 31,2026, as against Rs.2,534.73 lakh as on March 31, 2025.
FIXED ASSETS
The Companys net fixed assets stood at Rs.10,192.80 lakh as at March 31, 2026, as against Rs.9,086.47 lakh as at March 31, 2025.
INVESTMENTS AND CASH AND BANK BALANCES
As on March 31, 2026, the Companys investments (Noncurrent and Current) and Cash and Bank balances stood at Rs.2,04,535.77 lakh (including Rs.3,546.00 lakh (previous year Rs.3,546.00 lakh) invested in Indian Gas Exchange Limited (IGX) and Rs.500.00 lakh (previous year Rs.500.00) invested in ICX Private Limited (formerly known as International Carbon Exchange Private Limited), as against Rs.1,77,217.13 lakh as on March 31,2025. Increase is mainly due to accumulated profits and decrease in working capital.
TRADE RECEIVABLE
The Companys trade receivable is at Rs.122.00 lakh as on March
31,2026, as against 201.04 lakh as at March 31,2025.
SECURITY DEPOSITS
Security deposits given for various offices stand at Rs.412.77 lakh as on March 31,2026, as against Rs.422.28 lakh as on March 31,2025.
OTHER ASSETS
Other assets (Non-current and Current) stand at Rs.7,728.32 lakh as on March 31, 2025, as against Rs.6,792.33 lakh as on March 31, 2025; mainly due to advance given towards trade charges for scheduling and transmission to respective agencies.
KEY RATIOS
Key Ratios |
FY26 | FY25 | Change % |
Net Profit Margin |
63.59% | 63.37% | 0.34% |
Current ratio (in times) |
1.99 | 1.57 | 26.58% |
Trade payables turnover ratio (in times) |
9.59 | 8.62 | 11.20% |
Net capital turnover ratio (in times) |
0.77 | 1.07 | -28.02% |
PROFIT & LOSS STATEMENT ANALYSIS (CONSOLIDATED)
The consolidated financial statements of the Company include financial statements of ICX Private Limited [(ICX) (formerly known as International Carbon Exchange Private Limited [(ICX) (wholly owned subsidiary of the Company)] and Indian Gas Exchange Limited [(IGX) (an associate of the Company)].
On December 27, 2022, ICX was incorporated as a wholly owned subsidiary of IEX, to establish and operate a platform for the trading of various types of green products including carbon credits and certificates in India and outside India.
During FY26, ICX recorded profit amounting Rs.473.70 lakhs against Rs.11.07 lakhs loss for FY25.
As on March 31, 2026, the company holds 47.28% (previous year 47.28%) stake in IGX. Share in profit of associate for FY26 was Rs.1,979.53 lakh (previous year Rs.1,463.15 lakh).
During FY26, the Company received a dividend from its associate company amounting to Rs.531.90 lakh (previous year: Nil). In accordance with the equity method of accounting of Investment, this has been accounted against the carrying value of the investment in associate and is not included in the consolidated total income.
The Companys consolidated revenue stood at Rs.74,695.17 lakh in FY26 in comparison with Rs.65,736.69 lakh in FY25. The Companys consolidated profit after tax Increased from Rs.42,916.91 lakh in FY25 to Rs.49,292.12 lakh in FY26.
INTERNAL CONTROL
The Board has put in place various internal controls to ensure that they are adequate and are effective. The Board has also put in place state-of-the-art technology and has automated most of the key areas of operations and processes, to minimize manual intervention.
The design, implementation and maintenance of adequate internal financial controls is to enable it to operate effectively and ensure the accuracy and completeness of the accounting records, and are free from material misstatement, whether due to error or omission.
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