Indian Energy Exchange Ltd. (IEX) shares surged 10% to Rs 147.00 in late trading as the Appellate Tribunal for Electricity (APTEL) resumed its critical hearing on the controversial market coupling mandate. The sharp uptick from Monday's closing price of Rs 134.00 reflects investor optimism amid aggressive legal arguments challenging the regulatory decision.

APTEL Hearing Resumes With Procedural Objections

During the resumed proceedings, IEX's legal counsel raised serious procedural objections regarding a key report submitted by Power Grid. The counsel argued that a pivotal report, reportedly submitted by Power Grid in the first few weeks of January, has still not been made available to the exchange. "The report has not been given to us yet," the lawyer contended, highlighting significant transparency concerns in the regulatory process.

Questions Over CERC's Decision Rationale

IEX's counsel questioned the rational behind the Central Electricity Regulatory Commission's (CERC) decision to push ahead with market coupling without clear, current justifications. The Power Grid report was allegedly based on 'historical data', raising concerns about the validity of using outdated information for such a significant market restructuring decision. "There should have been some data on why the commission decided to go ahead with market coupling," the lawyer argued.

Market Coupling Impact on IEX's Dominance

Market coupling would necessitate a single clearing price across all power exchanges, a structural shift that investors believe would erode IEX's dominance in the market. The exchange currently commands nearly 85% of the market share, making the coupling decision particularly significant for its competitive position. The first phase mandates day-ahead market (DAM) coupling implementation by January 2026, where different power exchanges will act as market coupling operators on a round-robin basis.

Strong Business Performance Supports Investor Confidence

Adding to the positive sentiment, IEX released a robust business update for the third quarter, reporting total electricity traded volume of 34.08 billion units, marking a nearly 12% year-on-year increase from 30.45 billion units. This strong operational performance demonstrates the company's resilience amid ongoing regulatory challenges.

Previous Corruption Allegations Add Context

The current hearing follows APTEL's earlier explosive corruption allegations, where the tribunal stated they were informed the coupling order was implemented "only for some officers to make money." CERC had previously responded that it would consult and seek instructions regarding the withdrawal of the market coupling order, indicating acknowledgment of the serious nature of APTEL's observations.

Indian Energy Exchange reported a 2.8% year-on-year rise in electricity trading volumes to 11.44 billion units in December 2025, showcasing mixed performance across different market segments. While overall volumes grew, the performance varied significantly between different trading platforms.

Market Segment Performance

The exchange's monthly update revealed contrasting trends across its various trading segments. The following table summarizes the key performance metrics:

Real-Time Market Shows Strong Momentum

The Real-Time Electricity Market continued to demonstrate robust growth, with traded volumes rising 20.5% year-on-year to 3,833 million units during December 2025. This strong performance in the RTM segment helped offset the decline witnessed in the Day-Ahead Market, which recorded volumes of 5,899 million units, marking an 11.6% decline compared to the same month in the previous year.

Term-Ahead Segment Registers Exceptional Growth

The Day-Ahead Contingency and Term-Ahead Market segment, including the High-Price Term-Ahead Market, experienced remarkable growth during the month. Total volumes in this segment reached 931 million units in December 2025, representing an impressive 87% jump over December 2024 levels.

Green Market and REC Trading Performance

The renewable energy trading segments showed mixed results during December 2025:

Volumes in the Green Market, comprising the Green Day-Ahead Market and Green Term-Ahead Market, stood at 777 million units during December 2025, showing a marginal decline of 0.5% year-on-year. The weighted average price in the Green Day-Ahead Market for the month was ₹4.21 per unit.

REC Market Activity Remains Subdued

Activity in the Renewable Energy Certificate Market remained notably weak during December 2025. A total of 7.7 lakh RECs were traded during sessions held on December 10 and December 31, 2025, at clearing prices of ₹359 per REC and ₹345 per REC, respectively. The traded REC volume declined 53.7% year-on-year, indicating continued challenges in this segment.

The exchange announced that the next REC trading sessions are scheduled for January 14 and January 28, 2026, as market participants look for potential recovery in renewable certificate trading.