Shares of Indian Energy Exchange (IEX) are expected to come under pressure in trade today after the Central Electricity Regulatory Commission (CERC) approved the implementation of Market Coupling for the Day-Ahead Market (DAM), a move that could significantly dent IEX’s dominant position in power trading.
As per the CERC’s announcement, Market Coupling for the DAM segment will be implemented in Phase-I by January 2026. Notably, all existing power exchanges will serve as the Market Coupling Operator (MCO) on a rotational basis. The regulatory body has also instructed its staff to initiate a formal stakeholder consultation process for this implementation and propose necessary amendments to current Power Market Regulations, 2021.
This regulatory development is a potential game-changer for India’s short-term power trading landscape, where IEX currently commands a near-monopoly. According to Bernstein, IEX holds nearly 100% market share in the Day-Ahead Market (DAM) and Real-Time Market (RTM), and about 40% in the Term-Ahead Market (TAM). DAM, in particular, forms the backbone of IEX’s business, accounting for approximately 46% of its total volumes, followed by RTM at 40% and TAM at 14%.
Reacting to this, brokerage firm Bernstein has sharply cut its target price on IEX to ₹122 from ₹160, citing the full impact of market coupling on the company’s future revenues and profitability. The brokerage noted that while the development is still at an early stage, the implications are far-reaching. Once market coupling becomes operational, price discovery will be consolidated across exchanges, and trading activity may shift away from IEX’s existing platform, diluting its volume leadership and pricing power.
Market participants are likely to view this as a structural headwind for IEX, which has long enjoyed first-mover advantage and technological superiority in the space. Analysts believe that with the introduction of market coupling, competition between exchanges will intensify, and volumes could get redistributed depending on platform efficiencies, transaction costs, and user experience.
While there is still time for the full roll-out of the new system, the regulatory clarity is expected to weigh on investor sentiment toward the stock in the near term. IEX shares could react negatively as the Street begins to factor in earnings and margin pressures due to lower market share and elevated competitive intensity post-implementation.
