About Hindustan Power Exchange Limited Unlisted Shares

Section 1 – Overview

Hindustan Power Exchange Limited is a leading electricity trading platform that facilitates buying and selling of electricity and related products. Headquartered in Noida, Uttar Pradesh, the company incorporated on 24 April 2018 but started their operation in July 2022. The company is promoted by PTC India, BSE Investments and ICICI Bank. HPX provides a marketplace for power generators, distribution companies, and industrial consumers. The company facilitates trading in multiple types of trading such as – DAM & GDAM, RTM, TAM & GTAM, Contingency contracts, and renewable energy certificates. HPXL is licensed and regulated by CERC (Central Electricity Regulatory Commission). The electricity market is estimated around 238 billion units of electricity annually, HPX reported annual cleared volume of about 108-121 BU and sees increased participant onboarding. 

Section 2 – How the Company Makes Money?

2A – Operational Model

HPXL is a market place where electricity becomes the tradeable commodity. It bridges the gap between commercial trading and power girds. It provides a market for buyers and sellers by matching demand and supply. Operational model works as follows:

Bidding

Buyers and sellers log into the platform and places closed, anonymous bids specifying price and quantity (MW) of electricity available and required. On the same day, automated risk engines run in the background to ensure availability of sufficient margin in the buyer’s bank account. 

Price Discovery

Once the bidding window closes, advanced optimization algorithm runs in the background to gather all buy and sell side bids, frames the graph and determine Market Clearing Price (MCP) and Market Clearing Volume (MCV) at the intersection of these two curves.

Congestion Management 

At this stage, the exchange submits provisional cleared volumes with National Open Access Regulatory (NOAR) to check if the transmission lines have enough capacity. If the carrying corridor is overloaded, the engine triggers market splitting – it then divides the grid as per geographical zones. 

Dispatch Scheduling

Now, the finalized trade file is sent to GRID INDIA and it is the duty of dispatch centers to cross verify it with grid safety parameters and issue a final dispatch schedule. 

Execution

Now the final execution stage, physical delivery of electricity is facilitated through national grid. On the payment settlement side, buyer’s bank account is automatically debited and transaction is settled. 

2B. Revenue Model

Hindustan Power Exchange Limited (HPX) follows a diversified revenue model, with transaction fees serving as its primary source of income. Around 75%–85% of the company's revenue comes from fees charged on electricity traded through its platform. Every successful trade across different market segments generates a transaction fee, making this the largest contributor to HPX's overall earnings.

Another key revenue source is interest earned on advance cash margins, which contributes approximately 10%–15% of total revenue. Before participating in electricity trading, buyers are required to deposit funds as a security margin. HPX invests these deposits in safe and highly liquid financial instruments, allowing the company to earn a steady stream of interest income while ensuring secure market operations.

HPX generates recurring income through membership fees, which account for around 5%–10% of its revenue. Power traders, distribution companies (DISCOMs), power generators, and large industrial consumers pay a one-time registration fee to join the exchange, followed by annual membership and processing charges. This recurring fee structure helps strengthen the company's long-term revenue while supporting the growth of its participant base.

Section 3 – Competitive Landscape

Indian market has three Power Exchange players that are licensed by CERC – Indian Energy Exchange (IEX), Power Exchange India Limited (PXIL), and Hindustan Power Exchange Limited (HPX). Among the three HPX is the newest entrant – incorporated in 2022. 

• Indian Energy Exchange (IEX)

IEX is the dominant player in Indian power market capturing around 85% - 90% of market share. The exchange was launched in 2008. The exchange is publicly listed and has diverse participant across retail and institutional category. IEX dominates Day-Ahead Market (DAM) and Real-Time Market (RTM); holding approximately 90% of market share. 

Competitive Edge: Since the exchange is publicly listed, it has vast network of market participants. DISCOMs automatically defaults to IEX due to liquidity and surety getting their bids cleared. 

• Power Exchange India Limited

Launched in 2008, PXIL is a premier power exchange. Promoted by NSE & NCDEX; PXIL holds 5%-7% of market share. However, incorporated alongside IEX, growth of PXIL was stunted due to lack of liquidity that scares traders away. Capturing the first mover advantage, IEX got itself listed and captured almost entire market. However, PXIL still outperforming in Term-Ahead Market (TAM), Renewable Energy Certificate (REC) and ESCerts. 

Section 4 – Key Managerial Persons

• Harish Saran: Managing Director
• Niraj Nabh Kumar: Director
• Deepak Goel: Nominee Director
• Vishnu Kant: Nominee Director

Section 5 – Funding & Valuation