IEX Market Coupling Case — Stock up 9%; CERC lawyer says will take instructions on order withdrawal

Shares of Indian Energy Exchange Ltd. (IEX) gained as much as 13% on Tuesday, January 6, after lawyer representing the Central Electricity Regulatory Commission (CERC) told the Electricity Appellate Tribunal's (APTEL) that they are ready to take instructions from the tribunal to withdraw the July 23, 2025 order, which led to IEX's shares falling nearly 30% in a single trading session.

The counsels have sought more time, and APTEL has set January 9 as the next date for the hearing.

APTEL told CERC that if it informs them about the potential withdrawal of the July 2025 order, the tribunal will close the case on Friday itself.

CERC told APTEL it will have to consult and seek instructions on withdrawal of the order. It said it wanted to make the coupling order more consultative, fair and transparent. It said will take up the issue with CERC members, will take instructions on withdrawal of coupling order.

During the hearing, APTEL observed that it was told the market coupling order was done only for some officers to make money.

It said it saw a lot of theatrics in the making of the coupling regulations. Theatrics are a cause of concern; regulation could have been done quietly by CERC.

It said it expects CERC to be independent, above suspicion like Ceaser's wife. If there is something amiss, it would like to inquire and take action to avoid a repeat of the incident, it added.

IEX observed that even without the Securities and Exchange Board of India's (SEBI) findings on insider trading, the CERC's coupling order is wrong and needs to be set aside.

IEX Plea 

IEX has been seeking a withdrawal of the CERC order on market coupling, and till the case is decided, it is seeking a stay on the order.

The IEX petition claims that the CERC order is arbitrary and violates the principles of natural justice. It claims that the coupling order will only lead to the loss of market share without any conceivable benefits.

CERC Norms

In July 2025, the CERC approved the implementation of the market coupling norms, with the day ahead market (DAM), in accordance with the Power Market

Regulations of 2021. The move triggered a collapse in shares of IEX, from which a recovery is still underway on the stock.

As per the first phase of the norms, DAM coupling will be implemented by January 2026, as per which, different power exchanges will act as market coupling operators (MCOs) on a round-robin basis.

An MCO collects all buy and sell orders from all power exchanges, which is then aggregated and matched to discover a uniform market clearing price across all exchanges, regardless of the platform.

The CERC staff will also initiate stakeholder consultation for DAM coupling and propose the required regulatory amendments.

Grid India will serve as the fourth MCO for backup and audit purposes. It will also develop a software for term-ahead market coupling, run a three-month shadow pilot for the same and submit the feedback after the process is done.

For the real-time market, coupling will be considered at a later stage after the DAM experience as it requires further regulatory and operational examination.

The petition adds that the CERC order disrupts regulatory framework which has evolved over the past 17 years.

Here's why Market Coupling is negative for IEX

The decision to implement market coupling against the report submitted by Grid India is a negative development for IEX as this means it will lose its business moat of being the "best platform" for price discovery.

Also, the introduction of market coupling could meaningfully shift volumes to competitive exchanges. At present, IEX has a market share of nearly 85% in the spot market.

Insider Trading Allegations

During the previous hearing on November 28, 2025, IEX had cited the Securities and Exchange Board of India's (SEBI) report claiming CERC officials had indulged in insider trading and made illegal gains of ₹173 crore.

IEX told APTEL the coupling order, which caused its shares to plummet 29% in a single session, was part of the insider trading conspiracy by CERC officials. It said the coupling order is tainted and the Securities and the market regulator also named the author of the coupling order.

APTEL then observed that it is open to look into any case of corruption and that the regulator should avoid any appearance of wrongdoing.

Click here to check the timeline of events from July 2025

The power exchange had also reported its business update for the third quarter on Monday.

Shares of IEX ended off the highs of the day, closing with gains of 9% at ₹146.77.

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