Shares of Indian Energy Exchange (IEX) fell sharply by 26% following the Central Electricity Regulatory Commission’s (CERC) decision to introduce Market Coupling in the Day-Ahead Market (DAM) segment. The move, aimed at enhancing price efficiency and uniformity, could impact IEX’s market dominance in short-term power trading.
CERC’s order, issued earlier this week, confirms that Market Coupling will be implemented in Phase-I by January 2026. Under the proposed model, all existing power exchanges will participate as Market Coupling Operators (MCOs) on a rotational basis, rather than individually discovering market-clearing prices.
The regulator has also directed its staff to begin a formal stakeholder consultation process and draft amendments to the existing Power Market Regulations, 2021.
IEX currently holds a near-monopoly in the Day-Ahead Market (DAM) and Real-Time Market (RTM), according to a recent note by Bernstein. As per their estimates, IEX controls nearly 100% of market share in both DAM and RTM, and around 40% in the Term-Ahead Market (TAM). DAM alone contributes about 46% of IEX’s total traded volumes, followed by RTM at 40% and TAM at 14%.
Market Coupling is designed to consolidate orders from multiple exchanges into a single order book and enable uniform price discovery. This structural change could reduce IEX’s pricing power and reduce trading volumes on its standalone platform.
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