The Indian Energy Exchange (IEX) is reportedly considering an appeal against the Central Electricity Regulatory Commission’s (CERC) order on market coupling, according to a report from CNBC Aawaz. The development comes just weeks after CERC announced its decision to implement market coupling for India’s power exchanges in a phased manner, beginning with the Day-Ahead Market (DAM) by January 2026. The announcement has already shaken investor confidence in IEX, leading to a steep fall in its stock price and raising concerns about the company’s long-term market position.
Background on Market Coupling and CERC’s Decision
Market coupling is a regulatory mechanism designed to aggregate buy and sell bids from all power exchanges in India, including IEX, Power Exchange India Limited (PXIL), and Hindustan Power Exchange Limited (HPX). Through this mechanism, a uniform market clearing price (MCP) is determined, centralizing price discovery and ensuring better transparency, efficiency, and optimal use of transmission infrastructure across the grid.
On July 24, 2025, CERC formally approved the phased rollout of market coupling, starting with the DAM. The framework involves a round-robin system in which each power exchange will act as a Market Coupling Operator (MCO) on rotation, while Grid-India will serve as a backup and audit operator. The rollout will begin with a three-month pilot phase, followed by full implementation by January 2026. CERC has also stated that the Real-Time Market (RTM) will be considered for coupling at a later stage, once the DAM implementation has been reviewed.
Impact on IEX
IEX, which dominates the spot power trading market with over 85–90% share in the DAM and RTM segments, faces significant challenges from this regulatory shift. Its current dominance stems largely from its role in price discovery, which attracts liquidity and drives trading volumes. Market coupling effectively takes away this advantage by centralizing the clearing process, potentially eroding IEX’s competitive edge.
The market reacted sharply to CERC’s announcement. IEX shares dropped 20–30% on July 24, 2025, falling to a 52-week low in the range of ₹131.5–₹144.66. Analysts warn that this order could compress margins, reduce transaction fees, and make it easier for rivals like PXIL and HPX to compete more effectively.
IEX’s Possible Appeal at APTEL
According to CNBC Aawaz, IEX is exploring legal options to challenge the CERC order. The appeal, if filed, would go to the Appellate Tribunal for Electricity (APTEL), which handles disputes related to electricity regulations in India. While IEX has not disclosed its exact arguments, the potential grounds could include claims that the order disproportionately impacts its operations, undermines its business model, and was issued without sufficient stakeholder consultation.
The appeal would likely seek to delay, modify, or even overturn CERC’s decision in order to protect IEX’s pricing power and market dominance.
Analysts and Market Reactions
Brokerages have already begun revising their outlook on IEX. Bernstein, for instance, cut its target price from ₹160 to ₹122, citing the certainty of market coupling by January 2026 and the likely reduction in transaction charges due to increased competition. Analysts noted that IEX’s core moat—its liquidity advantage and independent price discovery—is at serious risk, making the stock less attractive for institutional investors.
On the other hand, rival players stand to gain from this regulatory shift. Shares of PTC India, a stakeholder in PXIL, rose nearly 5% on the day of CERC’s announcement, reflecting expectations of a more competitive and level playing field.
Broader Implications for IEX and the Power Sector
For IEX, the order represents a fundamental challenge to its near-monopoly status. With centralized price discovery, the exchange may struggle to maintain its high-frequency trading volumes, impacting both revenue and profitability. To remain relevant, analysts believe IEX must focus on innovation, such as developing new analytical tools, enhancing its trading platform, or diversifying into related energy services.
At the sector level, CERC’s decision supports the broader policy objective of modernizing India’s power market. By boosting exchange-based short-term trading over traditional long-term power purchase agreements (PPAs), market coupling could increase efficiency, lower tariffs, and enhance transparency. This aligns with India’s renewable energy targets of achieving 500 GW of installed capacity by 2030.
Conclusion
The coming months will be crucial for IEX as it weighs an appeal to APTEL and recalibrates its strategy to adapt to the changing regulatory landscape. While market coupling promises greater benefits for consumers and the overall power sector, it poses a significant challenge to IEX’s dominance. Whether the company manages to protect its market share or reinvent itself will depend on both regulatory outcomes and its own ability to innovate in a rapidly evolving energy ecosystem.
