Indian Energy Exchange (IEX) came under pressure, witnessing a sharp fall of as much as 30% following a significant announcement regarding market coupling on July 24, 2025.
Market participants turned cautious as regulators moved a step closer towards implementing a unified power market mechanism.
While IEX has long enjoyed a monopolistic edge in India’s power trading landscape, this development has triggered concerns around future margins, market share, and competition. But what exactly is market coupling, and why does it matter?
Put simply, market coupling is a mechanism that unifies price discovery across multiple power exchanges. At present, India has more than one power exchange, IEX being the major one, each with its own price for the same contracts.
Market coupling will remove this duplication by introducing a single clearing price for each product, discovered via a central algorithm operated by a government-nominated Market Coupling Operator (MCO). Once implemented, this would mean:
Until now, IEX has held a first-mover advantage and an almost-monopoly in the Day-Ahead Market (DAM), commanding over 90% market share. With market coupling:
In short, market coupling reduces IEX’s pricing power, and that’s what the market seems to be factoring in.
Though the announcement has led to a short-term dip in share price, the long-term picture could be more nuanced:
Possible Positives:
Risks to Consider:
After the sharp fall, IEX share price opened higher at ₹137.80 on July 25 and surged to ₹149.40 before dipping slightly. As of 11:17 AM, the stock was trading at ₹142.19, marking a 7.46% intraday gain.
Read More: IEX Shares Plunge 10% After Market Coupling Announcement; 4.1 Crore Sell Orders Pending!
Market coupling isn’t merely a regulatory formality, it's a shift in how the power market functions. And as the market evolves, so too must investors' perspectives.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Jul 25, 2025, 2:12 PM IST
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