IEX Share Price Crashes 28% As CERC Approves Market Coupling

IEX Share Price: Shares of Indian Energy Exchange (IEX) plunged 28 per cent intraday on July 24, hitting their 52-week low of Rs 135.26 apiece on the NSE, after the Central Electricity Regulatory Commission (CERC) formally approved the phased implementation of market coupling in the country’s power trading ecosystem.

In a detailed order issued on July 23, the regulator said it will begin market coupling of the Day-Ahead Market (DAM) by January 2026. The coupling will be done in a round-robin mode, where power exchanges, along with Grid-India, will alternately act as the Market Coupling Operator (MCO). This decision aims to introduce a uniform market clearing price, which is expected to improve price discovery, and enhance transmission efficiency.

This order also comes ahead of IEX’s Q1 FY26 earnings, which is scheduled to be released later today.

CERC has further directed Grid-India to begin a pilot for coupling the Term-Ahead Market (TAM), including contingency contracts. Plans for coupling the Real-Time Market (RTM) and RTM-Security Constrained Economic Dispatch (SCED) are still under review. CERC also asked power exchanges to share data with Grid-India to support the implementation process.

What Is Market Coupling

Market coupling is a mechanism where a central algorithm is used to combine and clear bids from all power exchanges. Instead of each exchange determining its own market price and volume separately, all buy and sell orders are pooled together and cleared using a common algorithm.

This will ensure that electricity is bought and sold at the most efficient price, no matter which exchange the bid is placed on.

India has three power exchanges: IEX, Power Exchange India Limited (PXIL), and Hindustan Power Exchange Limited (HPX). As of now, these exchanges work separately. Each one collects its own buy and sell bids and decides the price of electricity on its own.

This means electricity ends up being priced slightly differently on each exchange. Even though the difference is usually just a few paise, it creates an opportunity for traders to take advantage where they often try to buy power contracts from the exchange offering a lower price and sell it on the one with a higher price.

Why IEX Share Price Is Falling

IEX holds a dominant position in India’s power trading market. However, the regulator’s decision to implement market coupling has raised concerns among investors about the company’s future growth prospects. With a uniform price discovery and shared clearing system across exchanges, IEX may lose some of the competitive advantage it currently enjoys in terms of scale and liquidity.

The fall in share price came after months of testing a pilot version of market coupling. Grid-India, which ran the pilot, reported marginal improvements in cost savings and efficiency. Based on this, the regulator decided to go ahead with implementation.