Indian Energy Exchange Shares Recover Amid Uncertainty Over CERC Coupling Order
Shares of Indian Energy Exchange (IEX) rebounded 7% from the day’s low in a highly volatile session on January 9, amid continued uncertainty over the Central Electricity Regulatory Commission’s (CERC) stance on the market coupling order.
At a hearing before the Electricity Appellate Tribunal (APTEL), CERC’s counsel requested additional time to respond regarding the withdrawal of the coupling order. Ahead of the hearing, CERC issued a circular reaffirming that the market coupling order remains in effect.
By 11:05 am on January 9, IEX shares were trading flat at ₹149.87, having hit an intraday high of ₹160.27 and a low of ₹141.42.
Tribunal Questions CERC’s Independence
During the hearing, the APTEL bench emphasized the need to ensure that CERC acted fairly and independently in implementing the coupling order. According to CNBC-TV18, the tribunal remarked:
“We were told that this was done only for some officers to make money. Saw a lot of theatrics in making these regulations.”
Market coupling is an economic mechanism that creates a single, uniform electricity price across multiple trading platforms. This reduces IEX’s dominant position in the market.
The tribunal questioned how the coupling rules were formulated, observing that the process should have been conducted quietly and independently. They added:
“The theatrics are a cause of concern. Regulation could have been done quietly by CERC. We expect CERC to be independent and above suspicion, like Caesar’s wife. If something is amiss, we’d like to investigate and prevent a recurrence.”
What Are CERC Coupling Norms?
In July 2025, CERC issued directions under the Central Electricity Regulatory Commission (Power Market) Regulations, 2021, to implement Market Coupling. This framework was expected to impact trading volumes on IEX, causing the stock to drop 30% the following day.
Currently, power exchanges operate in two modes:
Real-Time Market (RTM)
Day-Ahead Market (DAM)
According to the order, starting January 2026, Grid-India will aggregate energy prices across all exchanges and publish a single, unified price, a process known as day-ahead market coupling. The move aims to enhance efficiency and boost confidence among market participants.
Implications for IEX
At present, electricity trading occurs on three exchanges:
Indian Energy Exchange (IEX) – Market leader with ~85% share
Power Exchange of India (PXIL)
Hindustan Power Exchange (HPX)
IEX dominates key segments such as DAM and RTM. Currently, buyers and sellers place bids independently on each platform, leading to separate price discovery.
With market coupling, a single market-clearing price will apply across all exchanges. Exchanges will only collect bids and forward them to a designated agency responsible for price determination.
This mechanism is expected to neutralize IEX’s dominance, as traders will have less incentive to prefer IEX over other exchanges, fundamentally changing the dynamics of India’s electricity trading market.
