IEX Share Price Crashes 23% After CERC Market Coupling Announcement

What Is Market Coupling in Power Sector?

Market Coupling refers to the process where bids from multiple electricity exchanges are aggregated and settled centrally.

Currently, multiple exchanges like IEX Share operate independently. Under the new system, their bids—especially in the Day-Ahead Market (DAM)—will be matched centrally, which may impact trading volume, operations, and revenue models of dominant players like IEX Share.

CERC’s Official Announcement

Late Wednesday night, CERC issued an order confirming its decision to roll out market coupling in phases. The first phase involves coupling the Day-Ahead Market (DAM) across exchanges using a round-robin model by January 2026.

The National Grid Operator, Grid-India, and other power industry players were consulted extensively before the decision was made. The goal is to enhance transparency, improve operational efficiency, and create a more cohesive pricing system in India’s electricity markets.Impact on IEX’s Operations

As a dominant player in DAM and Real-Time Market (RTM) segments, IEX Share is likely to feel the immediate effects of this regulatory change. Its market share and transaction fee-based revenue may be impacted if the central bid clearing lessens its competitive edge.

CERC stated: “Based on the inputs from Grid-India and other consultations, the Commission has decided to initiate the process of market coupling in a phased manner.”

Market coupling would require structural changes in:

• Trading operations
• Clearing and settlement processes
• Revenue models of exchanges

Timing of the Announcement Raises Investor Concerns

Interestingly, this regulatory development came just hours before IEX Share was expected to announce its Q1 FY26 earnings. As stakeholders now await management’s clarification on readiness and future strategy, this has increased investor anxiety.

• IEX had previously shown steady growth in transaction volumes across DAM, RTM, and Green Market segments. The Q1 results are expected to shed more light on
• Electricity demand trends (April–June quarter)
• Exchange-based trading volume changes

IEX Share Price Performance Snapshot

Time Frame	Change
1 Year	-3.07%
YTD 2025	-6.21%
6 Months	-0.18%
3 Months	-11.35%
1 Month	-9.93%

This latest 23% single-day drop on NSE further worsens the year’s performance for IEX, raising questions about its near-term growth outlook.

Brokerage Firms Split Over the Outlook

Bernstein lowered its target price for IEX Share from ₹160 to ₹122, maintaining a ‘Market-Perform’ rating. The firm stated:

“Market coupling is about as bad as it could get. Once the liquidity gap vanishes, the only way to compete is via transaction fees.”

On the contrary, UBS retained a ‘Buy’ rating with a target price of ₹285, calling the announcement a negative surprise but manageable. UBS noted that Grid-India’s own estimates suggested only 0.01% to 0.3% gain in volume post-coupling and that RTM coupling will be considered at a later stage.

UBS emphasized that in FY25, DAM and RTM together contributed nearly 80% of IEX’s revenue, highlighting the materiality of the move.

Axis Capital, meanwhile, estimated that if market coupling had been implemented in FY25, IEX’s EPS (Earnings Per Share) might have been 30% lower, primarily due to loss of market share.

What’s Next for IEX?

• As the regulatory environment shifts, all eyes are now on
• Q1 FY26 earnings release (expected today)
• Management’s guidance on operational strategy
• Adaptation plans before January 2026
• Trading volume and revenue outlook
• While the intent behind market coupling is to bring long-term efficiency and parity, it brings short-term risks to existing players, especially those with dominant positions like IEX.

For IEX, a market leader, how it navigates this regulatory shift will determine its competitive standing and investor confidence going forward.