Shares of the Indian Energy Exchange (IEX) dropped significantly on Tuesday, plunging over 12% after reports indicated that market coupling—a process where a uniform market clearing price is established for all exchanges in a region—will be implemented soon. The IEX stock fell to an intraday low of ₹209.40, marking a 12.47% drop from the previous close of ₹239.25 on the BSE. The stock, which recently hit a 52-week high of ₹244.35, saw a decline of 14.30% from this peak.
A total of 40.53 lakh shares of IEX changed hands, resulting in a turnover of ₹89.59 crore. The company’s market capitalization decreased to ₹19,195 crore, and it emerged as the top loser on the BSE during the session.
Technically, IEX shares are trading lower than their 5-day, 10-day, and 20-day moving averages but higher than their 30-day, 50-day, 100-day, 150-day, and 200-day averages. The Relative Strength Index (RSI) stands at 79.8, suggesting the stock is in the overbought zone. Additionally, with a beta of 1.4, IEX is prone to volatility over a one-year period.
The sharp decline is attributed to concerns surrounding market coupling, which is expected to be introduced either by the end of the current fiscal year or early next fiscal. The Power Ministry has directed the Grid Controller of India to complete a pilot study on market coupling under the guidance of the Central Electricity Regulatory Commission (CERC).
Analysts fear that market coupling will reduce trading volumes on the IEX platform, as a government-owned entity would take over price discovery and power dispatch for short-term power trades. This shift is likely to impact IEX’s dominant position in the power trading market, causing investor concerns.
IEX, a market leader in power trading, offers a range of trade markets, including electricity, green markets, and certificates. The company’s primary business includes day-ahead markets, real-time markets, and green day-ahead markets, which could be significantly affected by market coupling reforms.
