IEX Shares Plummet 10% on CERC Approval for Market Coupling in Day-Ahead Market

Indian Energy Exchange (IEX) shares have fallen 10% after the Central Electricity Regulatory Commission (CERC) approved market coupling in the Day-Ahead Market (DAM) to be implemented by January 2026. IEX shares have dropped 6% from their year-to-date high. The CERC has appointed power exchanges as Market Coupling Operators (MCO) on a round-robin basis.

Indian Energy Exchange (IEX) shares have fallen 10% after the Central Electricity Regulatory Commission (CERC) approved market coupling in the Day-Ahead Market (DAM) to be implemented by January 2026. IEX shares have dropped 6% from their year-to-date high. The CERC has appointed power exchanges as Market Coupling Operators (MCO) on a round-robin basis.

The decision by the CERC to implement market coupling in the DAM has significant implications for IEX. Market coupling aims to unify the price discovery process across multiple power exchanges by pooling bids centrally. This move is expected to reduce price disparities across regions and establish a more consistent pricing structure [1].

IEX, being a dominant player in the day-ahead and real-time markets, is likely to be directly affected by the operational changes associated with market coupling. The company had earlier reported steady growth in trade volumes and participation across various segments. However, the upcoming Q1FY26 results, scheduled to be released today, will provide further clarity on the impact of the regulatory update and the company's preparedness for the phased implementation timeline [2].

The implementation of market coupling can potentially shift volumes to competitive exchanges, meaning IEX's market share of nearly 85% in the spot market could be affected. Analysts from Bernstein have cut their price target for IEX, citing the regulatory overhang as the biggest reason why the stock is difficult for institutional holding [3].

Stifel, on the other hand, has increased its price target for IEX from $208 to $238, maintaining a Buy rating on the company's shares. The analyst notes a "solid, stable demand" for IEX's offerings and expects the company to potentially raise its guidance during the upcoming Q2 earnings reports [3].

References:
[1] https://m.economictimes.com/markets/stocks/news/iex-shares-hit-10-lower-circuit-after-cerc-nod-for-market-coupling-ahead-of-q1-results/articleshow/122871602.cms
[2] https://www.cnbctv18.com/market/iex-share-price-market-coupling-cerc-approval-timeline-impact-moat-market-share-competition-returns-19642424.htm
[3] https://www.gurufocus.com/news/2989698/stifel-raises-price-target-for-idex-corp-iex-to-238-iex-stock-news