IEX Loses Luster: 23% Share price crash after CERC’s market coupling approval

The stock opened at ₹169.1, which was 10% below the lower circuit. A few minutes later, the stock was locked at the 20% lower circuit.

New Delhi: Today is a big blow for IEX investors. After the Central Electricity Regulatory Commission (CERC) made a new decision about market coupling, the IEX shares dropped as much as 23% today on Thursday.

CERC has approved market coupling in the Day Ahead Market (DAM) under the Power Market Regulation 2021. In the first phase, all power exchanges will be connected to set a common clearing price by January 2026.

Other Important Points

The stock opened at ₹169.1, which was 10% below the lower circuit. A few minutes later, the stock was locked at the 20% lower circuit. There are still 4.1 crore sales orders pending. New derivative positions cannot be taken since F&O is under a ban.

IEX's Q1 results are also being released today, which could cause more market fluctuations.

Companies like IEX, which used to set prices based on demand and supply on their platform, will now lose that right. This means IEX's biggest USP is now in danger.

What Is Market Coupling?

In this process, a Market Coupling Operator (MCO) collects buy and sell orders from all power exchanges. These are then combined and cleared at the same price, no matter which exchange the order came from. Exchanges like IEX, PXIL, and HPX will take turns being MCOs. Grid India will be responsible for auditing and backing up the process.

Why Did IEX Fail?

IEX currently controls 85% of the spot market—this monopoly could be broken due to coupling. Customers can now switch between platforms, and prices will become uniform, giving other exchanges a fair chance. This is expected to put pressure on IEX's volume, revenue, and transaction charges.

What Brokerages Say?

Bernstein has kept the 'Market-Perform' rating on IEX but lowered the target price from ₹160 to ₹122. The brokerage says the CERC decision is more negative than expected. Now the coupling is set, and transaction charges may also come down soon.

Signs for investors: This decision shows how regulatory risks can affect even strong companies. Long-term investors now need to think of IEX as a 'Competitive Exchange' rather than a monopoly.

Technically, there is a strong support near ₹168-170. But if that breaks, the next support may be around ₹150-155.