Indian Energy Exchange Stocks Plummet After Power Pricing Reform Announced

Indian Energy Exchange Ltd.'s shares plummeted 23% after the federal power regulator decided to synchronize pricing across exchanges from January 2026. The move could lead to a significant loss of market share and revenue for the company, which currently controls 99% of the day-ahead market. Concentration of liquidity often leads to lower price discovery, encouraging more trade on the largest platform. The regulator reached the decision following a pilot trial that showed potential economic and growth gains from the reform.

Indian Energy Exchange Ltd. (IEX), the country's largest power trading bourse, experienced a significant decline in its share price following a decision by the federal power regulator to synchronize pricing across exchanges. The stock tumbled 23% at 11:25 a.m. local time on Wednesday, marking the biggest intra-day decline in the company's history [1].

The Central Electricity Regulatory Commission (CERC) announced that it will couple day-ahead markets in India from January 2026. This move aims to reduce tariff variations by aligning pricing across the three exchanges. Currently, IEX, being the dominant player, often benefits from the varying price discovery among exchanges [1].

Rupesh Sankhe, senior vice president for research at Elara Capital India Pvt. Ltd., commented on the impact of the reform, stating that "It’s a huge negative for IEX." The company could potentially lose nearly half of its market share in the day-ahead market and 25% of its overall revenues [1]. The concentration of liquidity at IEX often leads to lower price discovery compared to its rivals, encouraging more trade on the largest platform [1].

Sankhe also noted that any attempt to regain market share by reducing trading fees would further harm earnings. The regulator reached its decision following a pilot trial that demonstrated potential economic and growth gains from the reform [1].

The reform is part of a broader effort to modernize and streamline the Indian power market. While the immediate impact on IEX's share price is clear, the long-term effects on the market and the company's financial performance remain to be seen.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-24/indian-energy-shares-tumble-after-regulator-s-power-price-reform