Despite the surge in volumes, prices saw a downward trend. The average market clearing price in the Day-Ahead segment dropped 16% YoY to ₹4.18 per unit, while prices in the Real-Time Market declined 23% YoY to ₹3.83 per unit.
The IEX stock has fallen over 30% in the last one month, in reaction to a negative development with regards to market coupling norms, which have been a major overhang on the stock.The Central Electricity Regulatory Commission (CERC) has approved he implementation of the Market Coupling norms, with the Day Ahead Market (DAM), in accordance with the Power Market Regulations of 2021.
Under the first Phase of these norms, coupling of the Day-Ahead Market (DAM) will be implemented by January 2026, under which, different power exchanges will act as Market Coupling Operators (MCOs) on a round-robin basis.
A Market Coupler collects all buy and sell orders from all the power exchanges, which is then aggregated and matched to discover a uniform market clearing price, across all exchanges regardless of platform.The CERC staff will also initiate stakeholder consultation for DAM coupling and propose necessary regulatory amendments.
Grid India will serve as a fourth market coupling operator for backup and audit purposes. It will also develop a software for Term-Ahead Market coupling, run a three-month shadow pilot for the same, and submit feedback post completion of the process.
For the Real-time Market (RTM), coupling will be considered at a later stage after the DAM experience as it needs further regulatory and operational examination.
How does this impact IEX?
The decision to implement market coupling against the report submitted by Grid-India has come as a negative development as this would mean IEX loses its business moat of being the “best platform” for price discovery.
Additionally, the introduction of market coupling can meaningfully shift volumes to competitive exchanges. Currently, IEX has a market share of nearly 85% in the spot market.
Shares of IEX are trading 0.24% higher on Tuesday at ₹134.30.
