IEX Faces Setback By CERC's Market Coupling Move — How This Affects Shareholders
The Central Electricity Regulatory Commission has approved a phased rollout of market coupling across India's power exchanges, beginning with three months of pilot run.
The decision shifts price-setting responsibilities from individual exchanges to a central body, a development that may hurt Indian Energy Exchange, which currently handles the bulk of trade volumes and plays a key role in price discovery.
The Commission has asked the Grid Controller of India to start with pilot testing of three mechanisms: coupling the Real-Time Market (RTM) across all exchanges, coupling the RTM with Security Constrained Economic Dispatch, and coupling the Day-Ahead Market.
Day-Ahead Market coupling is scheduled to go live in January 2026, while coupling of Real Time Market and Term-Ahead Market will follow in stages.
Market coupling is a process where all buy and sell bids from participating exchanges are aggregated by a single market coupling operator i.e. the Grid Controller of India. This operator uses an algorithm to match supply and demand, setting one uniform market-clearing price.
This replaces the current system where each exchange sets its own prices.
The change is aimed at improving market efficiency, but it reduces the commercial price discovery role of exchanges like IEX in determining prices.
Since IEX earns most of its revenue from high-volume trading in the Day-Ahead Market and Real-Time Market segments, the shift could affect its position and profitability.
Shares of IEX hit an all-time low after slumping over 26% following the market coupling announcement by the power regulator. The stock slump eroded nearly 4,000 crore of market capitalisation. This drop came even as the NSE Nifty 50 index was down only 0.6%.
The IEX stock has declined 3.06% over the past 12 months and is down 6.98% so far this year. Trading volume was 22% of its 30-day average, and the relative strength index stood at 43.07.
Meanwhile, shares of PTC India rose during the session, supported by its investment in Hindustan Power Exchange, which is also expected to benefit from the planned market integration.
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