New Delhi: Indian Energy Exchange (IEX) shares took a massive hit on Thursday, plunging 29.5% to close at ₹132.45 on the BSE. This sharp drop came after a major announcement by the Central Electricity Regulatory Commission (CERC), which approved the implementation of market coupling in the Day-Ahead Market (DAM) starting January 2026.
The decision has sparked concerns around IEX’s future market leadership and its primary revenue model, rattling investor confidence despite a strong Q1 performance.
What Is Market Coupling and Why Is It a Big Deal?
Late Wednesday, CERC said it will implement market coupling in phases, beginning with the Day-Ahead Market. Under this system, bids from all power exchanges will be pooled and cleared by a central agency to ensure uniform price discovery across platforms.
While the goal is to increase market efficiency and reduce regional price differences, the move could severely dent IEX’s competitive edge. Currently, IEX earns a significant portion of its revenue through transaction fees, thanks to its liquidity advantage. Market coupling may dilute this edge.
Brokerage Views: Mixed Sentiments Across the Street
Global brokerage Bernstein didn’t mince words, calling the development “as bad as it gets” for IEX. The firm slashed its target price to ₹122, retaining a ‘Market-Perform’ rating. Bernstein noted, “With the moat of liquidity gone, the only way to compete is through transaction charges.“
However, UBS offered a more optimistic view. While it acknowledged the regulatory announcement as a “negative surprise,” it maintained a ‘Buy’ rating with a target price of ₹285. UBS pointed to Grid-India’s analysis, which showed only a 0.01% to 0.3% impact in terms of market savings or cleared volumes. It also noted that Real-Time Market (RTM) — which contributes 30% of IEX’s revenue — remains untouched for now.
Technical Indicators Signal Bearish Trend
From a technical standpoint, the charts aren’t looking good for IEX either.
Kunal Kamble, Senior Technical Research Analyst at Bonanza Portfolio, noted that the stock has broken down from a double top pattern with a significant gap, indicating strong bearish momentum. He added, “The price is below all major EMAs, RSI is down to 14, and DMI confirms heavy selling pressure.“
Hardik Matalia from Choice Broking echoed similar concerns: “The stock broke key support zones with strong volume. RSI at 17.68 shows aggressive selling. Until we see volume-backed price recovery, any bounce should be treated as an exit point.“
Both experts suggested avoiding fresh long positions until there’s clarity on how the regulatory changes will play out.
Strong Q1 Numbers Overshadowed by Regulatory Fears
Interestingly, IEX released its Q1 FY26 earnings post-market on Thursday, showing robust growth.
- Net profit rose 25% YoY to ₹120 crore
- Revenue climbed 19% to ₹184.2 crore
- Electricity volumes jumped 14.9% YoY to 32.4 billion units
- REC trading surged 149.3% to 52.7 lakh units
However, average prices declined in both DAM and RTM due to early monsoons and unseasonal rains reducing power demand:
- DAM average price: ₹4.41/unit (down 16% YoY)
- RTM average price: ₹3.91/unit (down 20% YoY)
Despite operational strength, the regulatory move took center stage, pulling down investor sentiment.
What Lies Ahead for IEX?
With market coupling set to roll out by early 2026, analysts expect continued volatility in IEX’s share price. While the Q1 performance proves the company’s fundamentals remain strong, investors remain worried about the long-term impact of losing pricing control and volume leadership — the two core pillars of IEX’s success so far.
For now, caution is the name of the game. Investors are advised to wait for more regulatory clarity before making fresh bets.