Summary: IEX shares fell as much as 23% to ₹144.66 after CERC approved market coupling for power exchanges by January 2026, raising concerns over IEX’s dominance, earnings visibility, and margins as centralised price discovery threatens its core business model.
IEX share price plunged up to 23% on July 24 after Central Electricity Regulatory Commission (CERC) announced plans to implement market coupling for power exchanges by January 2026. The announcement, which came just hours before IEX’s Q1 FY26 earnings release, triggered widespread concern among investors about the company’s future earnings visibility and market dominance.
CERC’s order specifies that coupling will start with the Day-Ahead Market (DAM), the largest segment of the power exchange market, in a round-robin mode. The real-time market (RTM) coupling will be considered later, following operational experience with DAM. The order emphasises uniform price discovery, improved transmission line usage, and maximisation of overall market benefits.
Market coupling, widely used in global energy markets, involves pooling bids from multiple power exchanges and clearing them centrally to create a single uniform price for electricity. This mechanism is designed to enhance price discovery and operational efficiency but shifts the role of price setting away from individual exchanges to the Grid Controller of India.
IEX currently commands more than 90% market share in both DAM and RTM. In FY24, DAM volumes crossed 73 billion units, while RTM posted 19% year-on-year growth. These segments contribute substantially to IEX’s revenue and profitability, with its dominance largely built on efficient and competitive price discovery.
However, under the new mechanism, centralised price determination will eliminate the competitive advantage that allowed IEX to dominate. Further, this could lead to lower trading margins and reduced profitability.
Indian Energy Exchange (IEX) shares witnessed a sharp sell-off on Thursday, July 24, tumbling as much as 23% to ₹144.66 intraday on the BSE after the Central Electricity Regulatory Commission (CERC) announced that market coupling for India’s power exchanges will be implemented by January 2026.
The stock initially hit its 10% lower price band at ₹169.10. As the day progressed, the fall only worsened, marking a fresh 52-week low of ₹144.66.
Disclaimer: The article is for informational purposes only and not investment advice.
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