IEX Under Pressure, Shares Drop 28%: How India’s New Market Coupling Plan Could Redefine Electricity Pricing

India’s electricity trading landscape is on the verge of a major shift. The Central Electricity Regulatory Commission (CERC) has announced plans to introduce market coupling. It is a reform that could significantly reduce the Indian Energy Exchange’s (IEX) role in price discovery. The purpose of this move is to introduce a uniform electricity price across all power exchanges.

IEX currently controls the spot power market. The buyers and sellers determine prices independently. However, in market coupling, bids and offers from all exchanges will be aggregated and cleared through a unified mechanism. This will establish one market clearing price across all platforms.

IEX Role: What Market Coupling Means for India’s Energy Sector

The Central Electricity Regulatory Commission, in its July 23 order, set a timeline for the phased rollout of the plan. The rollout will begin with the day-ahead market by January 2026. Real-time and term-ahead markets will follow after further testing and regulatory discussions.

The reform aims to improve pricing efficiency, reduce transmission constraints, and maximize economic surplus across participants. Grid-India will act as a backup operator, and the role of market coupling operator will rotate among exchanges.

There was a pilot test between December 2024 and March 2025. It showed small but measurable welfare gains of ₹38 crore in the day-ahead market.

Stock Reaction and Future Outlook for IEX

IEX shares fell 28% after the announcement. It is considered to be the sharpest intraday decline since its listing in 2017. Market analysts are concerned that the new framework could significantly reduce IEX’s market dominance and compress its margins.

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