IEX Shares Crash 20% After CERC Announces Market Coupling From January 2026

On Thursday, the Indian Energy Exchange, known as IEX shares, cracked 20 percent, touching a day’s low price of Rs 150.30 after it had come under the spotlight following the decision by India's power regulator, the Central Electricity Regulatory Commission (CERC), to move forward with market coupling. This significant market reform, scheduled to begin with the Day-Ahead Market (DAM) in January 2026, aims to create a single, uniform price for electricity across all power exchanges. According to the regulatory order, all buy and sell bids from participating exchanges will be aggregated and matched by a central market coupling operator, Grid Controller of India, using a single algorithm for price discovery. The intended objectives include improving overall market efficiency, improving liquidity, and creating a more competitive environment for electricity trading.

Market coupling was first proposed as a response to evolving dynamics within India's power sector, which include the transition towards renewables and the need for more efficient system design. Under the new regime, individual exchanges like IEX will no longer determine their own price points for the DAM segment; instead, there will be one market-clearing price across the exchanges, with power exchanges acting primarily as bidding and transaction platforms. The change is widely expected to eventually reduce the commercial and price discovery dominance that IEX has historically maintained, with analysts anticipating some impact on its market share and revenue from core high-volume segments.

IEX had delivered an outstanding financial performance in FY25, achieving record volumes and robust earnings despite regulatory headwinds. The company traded 121 billion units (BUs) of electricity, reflecting an 18.7 percent year-on-year increase, and facilitated the trade of 178 lakh Renewable Energy Certificates (RECs), representing a 136.3 percent YoY surge. On the financial front, consolidated revenue climbed 19.62 percent year-on-year to Rs 537 crore, while consolidated profit after tax (PAT) jumped 22.3 percent to Rs 429.2 crore. 

The company’s management remained optimistic despite the upcoming regulatory transformation. They had affirmed that the company's commitment to innovation and expanding its presence, notably through the planned launch of new products such as a coal exchange, is expected to unlock new growth avenues. Ongoing investments in technology and market infrastructure, including support for virtual power purchase agreements and advanced trading platforms, are seen as key to maintaining IEX’s leadership as the market evolves.

Management highlighted that incentives had been introduced in the term-ahead and REC market segments to retain competitiveness amidst rising competition. IEX maintains around 85 percent market share in the spot market, as per sources. The company earlier expected annual volume growth in the 15 percent to 20 percent range, helped by product launches and policy changes. 

The outlook for FY26 remains positive, with strong liquidity expected from both thermal and renewable segments. Analysts anticipate the introduction of new products, increased private participation, and adoption of longer-duration contracts to drive double-digit growth in traded volumes.

Today, IEX is expected to release its Q1FY26 results. Market participants and investors are keenly awaiting these numbers to assess ongoing momentum and the company's adaptability as the regulatory environment shifts.

It is essential to acknowledge that the impact of market coupling on IEX’s business will not be immediate. The transition takes time, commencing with a pilot phase and subsequent full rollout in the DAM segment by January 2026, followed by possible inclusion of other segments later on. As a result, although volume and revenue pressures are expected, these will be incremental rather than abrupt. It depends on how IEX overcomes these developments and adapts its business strategies to explore fresh growth levers in a dynamic market.