IEX shares crash 10% on market coupling buzz; what should investors do?

The sudden decline in IEX share price came amid a report that Power Ministry apprise all the relevant stakeholders on market coupling and its benefits

IEX share price today: Indian Energy Exchange (IEX) witnessed a sudden decline in its share price on Wednesday, June 11, 2025. IEX shares tumbled 10.2 per cent today, hitting an intraday low of ₹188.5 per share on the BSE amid heavy volumes.

 

The sudden decline in IEX share price came amid a report that Power Minister Manohar Lal could apprise all the relevant stakeholders on market coupling and its associated benefits.

 

A report by TV channel CNBC TV18 said that market coupling would happen through a broad bid, and not any internal bid. Business Standard could not independently verify the report.

 

 

At 3:05 PM, IEX stock was trading 7.8 per cent lower at ₹193.2 per share, weighed by 3.17 million volumes on the BSE. By comparison, around 1.5 million shares, on average, changed hands on the counter over the past two weeks. Combined with the volumes on the National Stock Exchange (NSE), around 69.21 million shares have changed hands on both the exchanges so far in trade.

 

In the derivatives market, put options for IEX scrip jumped three-fold the average. This was the stock's biggest one-day decline in 15 weeks.

 

What is market coupling?

Market coupling is a process through which buy and sell bids from all the three power exchanges -- IEX, Power Exchange India Limited (PXIL), and Hindustan Power Exchange Limited (HPX) -- will be aggregated to arrive at a single market clearing price (MCP).

 

At present, each power exchange collects their own buy and sell bids to arrive at a MCP of its own. This leads to variation in the price of electricity on each exchange.

 

Market coupling process, in the electricity markets, aims to unify power trading platforms to ensure efficiency, transparency, and price discovery across interconnected markets.

 

At present, India is exploring market coupling through a central entity, likely Grid-India, to unify price discovery for the Day-Ahead Market (DAM) and other segments.

 

How will market coupling affect IEX?

While market coupling is beneficial from consumer point of view as it will encourage more competition and transparency in the electricity prices, while improving liquidity across exchanges to reduce price volatility.

 

Investors, typically, sell IEX shares due to market coupling fears as the exchange has a dominant market share of around 90 per cent in the electricity market. A level playing field across exchanges would threaten the influence it has in the price discovery mechanism.

 

That apart, any shift in volumes or trade preference from IEX to other power exchanges could adversely affect IEX's revenue due to lower fee income.

 

IEX share price history

Over the past one month, IEX share price has surged around 11 per cent on the BSE as against a 4 per cent rise in the benchmark Sensex index. From its 52-week low level of ₹151 per share, the stock is up 39 per cent.

 

IEX stock analysis: should you buy or sell IEX shares?

According to analysts at Reliance Securities, the recent uptrend in IEX stock had helped it breach the previous resistance line on the daily chart. The stock's 10-day moving average line is well above the 21-day moving average line, indicating a bullish trend.

 

Further, the Relative Strength Index (RSI) is showing a strong upward movement, reaching 73.18. The level is still below the 'overbought' threshold of 80.  

 

"Investors may consider taking an entry position at the current market price (CMP), as the stock could provide an opportunity for further upside movement. The Risk to Reward Ratio is favorable at 1: 1.60," the brokerage said in a note on Wednesday.

 

The brokerage suggests investors buy IEX stock at current levels with a stop loss of ₹186. Their two-month share price target on the stock is ₹224, followed by ₹251.

 

Fundamentally, JM Financial Institutional Equities has initiated coverage on IEX stock with a 'Buy' rating and a share price target of ₹231 as it believes the risk-reward is not in the favour the regulators who wish to implement market coupling (MC) to centralise scheduling and dispatch of power and reduce costs.

 

Meanwhile, demand for power, both energy and peak power, in India has grown at an unprecedented rate of 8.5 per cent during FY21-24 vs the historical average of 4.5-5.5 per cent. It is projected to grow at a CAGR of more than 6 per cent during FY24-32. Further, the share of renewables (solar, wind) in total generation has increased from 10 per cent in FY20 to 14 per cent in FY25, and it is likely to increase to 24 per cent/35 per cent by FY27/FY32.

 

IEX's revenue, meanwhile, grew from ₹198.6 crore in FY17 to ₹537.3 crore in FY25, registering a CAGR of 13 per cent, broadly in line with the growth in the power exchange market, which expanded at a CAGR of 15 per cent from FY17-FY24. During the same period, the company's Ebitda increased from ₹143.5 crore in FY17 to ₹453.7 crore in FY25, with Ebitda margin improving from 72 per cent to 84 per cent.

 

"With rising power demand and an increasing share of exchange-based transactions in the total electricity market, we expect the volume traded through the exchange to grow at a CAGR of 13 per cent during FY25-28. This is estimated to drive growth in revenue, and PAT at CAGRs of 16 per cent and 14 per cent, respectively, over the same period," JM Financial said.