IEX share price crashes 23% to hit 52-week low. What's behind the fall?
Currently, electricity prices in India's spot power markets are discovered independently on multiple exchanges—a system that has worked in IEX's favour. The company currently enjoys a commanding 90%+ market share in both the Day-Ahead Market (DAM) and Real-Time Market (RTM), which together make up the bulk of its revenues. In FY24 alone, DAM volumes crossed 73 billion units, while RTM volumes saw a 19% year-on-year growth.Market coupling, however, removes this competitive advantage by routing all price discovery through a single central clearing engine, operated by the Grid Controller of India. That means IEX and its smaller competitors like PXIL and HPX will no longer compete on price efficiency, effectively levelling the playing field and cutting into IEX's pricing power, margins, and volume stickiness."This isn't a drill anymore. Market coupling is no longer just a theoretical risk. It is now imminent," said Harshal Dasani, Business Head at INVasset PMS. 'This fundamentally alters the market structure and puts pressure on IEX's revenue model. Investors will now re-rate the stock with a structurally weaker outlook.'While the CERC has pitched the move as one aimed at improving transparency, efficiency, and grid optimisation, market participants are more focused on the potential downside: a hit to trading volumes, loss of operational edge, and a serious dent in IEX's valuation multiples.Investor sentiment reflected those fears.The stock hit its lower circuit early in the trading day, triggering heavy sell-offs and wiping out a significant chunk of its market capitalisation in just a few hours.Market participants are also bracing for muted commentary when the company announces its Q1FY26 results later today. Analysts expect management to address how IEX plans to adapt to the new regime, defend its platform stickiness, and explore possible diversification to mitigate regulatory headwinds.The proposed phased rollout will first test coupling across RTM, DAM, and Security Constrained Economic Dispatch (SCED) over a three-month pilot. If successful, it could lead to full-scale integration across market segments, permanently altering India's short-term electricity trade architecture.advertisement(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
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