IEX shares crash 23% after CERC approves market coupling

Shares of Indian Energy Exchange (IEX) slipped by 23%, falling to ₹144.66 and hitting a new 52-week low during today’s trading session. This sharp decline followed the Central Electricity Regulatory Commission’s (CERC) announcement of its decision to implement power market coupling in India by January 2026. The announcement came just ahead of the electricity regulator’s Q1 results, which are expected to be released today.

According to the report, the coupling of the day-ahead market (DAM) of power exchanges will be implemented in a round-robin manner by January 2026. “Under the round-robin mode, the power exchanges may act as the Market Coupling Operator (MCO) on a rotational basis, with Grid-India serving as the fourth MCO for backup and audit purposes. This arrangement aims to ensure efficient functioning of the power exchanges and build confidence among market participants,” the report noted.

What is market coupling?

India currently has three power exchanges: Indian Energy Exchange (IEX), Power Exchange India Limited (PXIL), and Hindustan Power Exchange Limited (HPX). Currently, each of these exchanges handles bids independently, resulting in varying electricity prices or market clearing prices (MCPs) across platforms.

Market coupling is a mechanism where all bids from various power exchanges are pooled together and matched centrally to determine a uniform market clearing price for the country. This ensures price convergence and improves market efficiency.

According to CERC, market coupling will promote the discovery of a uniform market clearing price for the DAM, Real-Time Market (RTM), or any other market as notified by the Commission. It is also expected to ensure optimal utilization of transmission infrastructure and maximise economic surplus for both buyers and sellers by considering all bid types in a unified clearing process.

The regulator has clarified that it will take a phased approach: the coupling of the RTM will be considered only after gaining operational experience with the DAM coupling.

Meanwhile, IEX is facing the heat from this development. Despite holding an 85% share in spot power trading, the new framework would level the playing field, reducing IEX’s dominance and removing its pricing advantage over rival exchanges.