Electricity powers more than just homes and factories, it powers ambition. And India’s ambition is massive.

As the country industrializes, urbanizes, and electrifies everything from rural homes to mega data centres, the demand for power is surging like never before.

By 2047, India’s electricity requirement is expected to quadruple. Clean energy, especially solar and wind, is taking centre stage.

And to manage all this efficiently, we need a robust, transparent marketplace for power trading.

That’s where the Indian Energy Exchange (IEX) comes in — a silent but powerful force behind India’s electricity backbone.

Over the past decade, IEX built itself into a near-monopoly, facilitating over 90% of all short-term electricity trade in the country.

Think of it as the NSE or BSE… but for power.

With a tech-driven platform, predictable business model, and first-mover advantage, IEX was every investor’s darling — consistently profitable, high-margin, and riding India’s energy transition wave.

But then came a twist. And not just a minor one.

Today, a regulatory move sent shockwaves through Dalal Street.

The CERC approved market coupling norms, which have remained a key overhang for IEX in the past few months. 

The company’s stock price tanked up to 26% intraday, as investors feared the company’s monopoly could be in threat.

IEX Shares Crash

So, what exactly is market coupling? Why did the market react so sharply? And is this the start of a structural shift in the Indian power exchange landscape?

Let’s find out.

What is Market Coupling and How Does it Impact IEX?

The Central Regulatory Electricity Commission (CERC) has approved the implementation of power coupling. This means that instead of each power exchange (like IEX) setting prices separately, all exchanges will now have one common price for electricity in a given time slot.

In the first phase, starting January 2026, the Day-Ahead Market (DAM) will be coupled. Different power exchanges will take turns (round-robin) to manage this.

This is bad news for IEX, the largest exchange, because:

• It may lose its edge in price discovery.
• Trading volumes could shift to newer or smaller competitors.
• IEX currently controls 85% of the spot market. That dominance is now at risk.

Key Aspect	Details
What’s Changing	Market coupling approved for power trading
Starts From	January 2026 (Phase 1)
Impact on IEX	May lose pricing edge and market share
Current Share	IEX holds ~85% of spot market
Why It Matters	One common price across all power exchanges

About IEX

Indian Energy Exchange (IEX) is the first and largest energy exchange in India providing a nationwide, automated, electronic trading platform for trading electricity products and for physical delivery of electricity, renewable energy certificates and energy saving certificates.

Currently, IEX, Power Exchange of India (PXIL) and the recently licensed Hindustan Power Exchange (HPX) are the three nodal power exchanges in the country, with IEX accounting for 85% of the market share. So, it’s a virtual monopoly.

IEX FY25 Product Mix

Source: Investor Presentation

Outlook

India is currently seeing a structural growth story in the power sector, backed by rising demand and rising needs owing to infrastructure push. 

Rising Power Demand

Source: IEX Investor Presentation

But if India is to take giant strides to emerge as one of the strongest economies in the world, the power sector must play a critical role.

India is the third-largest producer and second-largest consumer of electricity worldwide. It goes without saying that in an increasingly digitised and automated world, power will remain a necessary and critical resource. 

For India to take its rightful place in the world economy, making its electricity market more competitive and efficient is of utmost importance.

And that’s what this market coupling move is aimed at. While market coupling will increase competition for IEX, it will also improve efficiency in India’s power market.

IEX may lose some market share in the short term, but the overall growth in power trading volumes could still benefit the company in the long run. Even if IEX’s market share drops, a bigger market can mean more business in absolute terms.

Nevertheless, a risk for IEX is that it operates in a highly regulated industry with the Central Electricity Regulatory Commission (CERC) exercising tight control. Business expansion is subject to regulatory approvals and demand is also uncertain with cycles seeing excess generation and poor electricity demand.

Now, investors are keenly awaiting IEX’s quarterly results, which will be released later today. The management’s comments on the recent coupling news should be key.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.