IEX shares fall over 4% after another Market Coupling update; Details here

IEX contended that its own commercial success "can't be nationalised," and questioned whether exchanges as different as BSE and NSE could simply be "clubbed together" under a common framework.

The Supreme Court has declined to intervene in the ongoing Indian Energy Exchange (IEX) Market Coupling norms dispute, stating that this is "not the appropriate stage to hear the matter," on Monday, August 3.

In a setback for IEX, the apex court has allowed the Central Electricity Regulatory Commission (CERC) to go ahead with framing market coupling regulations, while clarifying that it has not expressed any opinion on the merits of the case.

Shares of IEX fell as much as 4% after the Supreme Court remarks.

What IEX Argued Before the Supreme Court?

IEX had approached the Supreme Court seeking either a stay on CERC's regulation-drafting process or a complete halt to it. During the hearing, IEX's counsel made several sharp arguments against market coupling, calling it a form of "nationalisation" and "socialism."

The company contended that its own commercial success "can't be nationalised," and questioned whether exchanges as different as BSE and NSE could simply be "clubbed together" under a common framework.

IEX also flagged a SEBI report that reportedly pointed to instances of illegal trading involving CERC officials who are part of the team formulating the coupling regulations, raising concerns about a conflict of interest.

The company also clarified that it was "nobody's case" that there is any monopoly or duopoly in the power exchange market. To illustrate its point on market diversity, IEX drew an analogy with Delhi's retail markets, asking whether a customer visiting the more popular Khan Market could reasonably demand goods sold specifically in RK Puram Market, arguing that differing market popularity does not justify forced coupling.

What Were The Supreme Court's Observations?

The bench, however, was unconvinced that judicial intervention was warranted at this stage. The Court observed that the power exchange space "appeared to be an unorganised space" that is "in need of regulation." It further noted that since the regulations are yet to be finalised, IEX would have full liberty to challenge them once they are notified by CERC.

Shares of IEX are currently trading 3% lower after the Supreme Court remarks, at ₹128.45. The stock has remained flat all through the year, down around 4% year-to-date as well.