June volume reports out. RTM continues to grow at a much faster pace.
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Thanks for sharing this @TKarthik . Excellent read by the way. Out of the four scenarios, which one do you guys think is the most probable? I guess because of the low social benefit, tribunal will most likely rule in favour of IEX when MC is implemented and in retaliation the fee cap may be lowered by 25%, which I think way worse than just MC.
And I felt those projections are a bit too conservative, what do you guys think?
It is likely that CERC will ask IEX to spin off new independet company for price discovery with IEX becomes broker and get price for spin off. There will not be any control from IEX but it will be controlled by grid india.
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It is a very good analysis of IEX business.
i see dam coupling and transaction fees reduction of 25% to be base scenario going fwd.
Just that I found valuations projections for few of the scenarios in this article to be bit harsh.
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I have one question if anyone can answer. How should one view the long term outlook of IEX if govt is out for blood? The market coupling order was definitely meant to eliminate it’s monopoly but could not be done due to execution challenges. Thanks
Disc: had small position. exited due to other opportunity
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I have thought a lot about this.
Govt has to allow profits if it wants innovation while maintaining competition. Its tough for govt to achieve both because of the network effects in such businesses. The best it can do is tightly regulate the markets and ensure no player does any foul play.
I feel like govt is intervening too much and trying to fix superficial issues instead of real issues which can deepen market multifold.
If govt changes rules as it likes and when it likes which harms the industry rather than benefitting then no private player would invest in better technologies and hence no innovation.
So govt has to give in a bit and allow profits if it wants innovation else we all know how govt website/it dept is and that would become the state of indian electricity market…
These are my thoughts based on past 6 months of closely following all updates.
Disc: invested and baised
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One thing is necessity of the day, to harvest benifits of renewables energy fully, THERE MUST BE SINGLE PRICE DISCOVERY. BY NEW GRID INDIA SOFTWARE OR IEX SPIN OFF.
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The thread is flooded with loads of information..Opinion-Floods renewed after ppfas’s position.
Lots of invested fellas took IEX’s brief and vented out against coupling, literally taking their brief, even scrutinized commission/court rulings..
I would like to restate my plain-simple experiences/understanding…'“On a policy-Regulators do not backtrack” i think it is not about signaling out any individual/entiry but its usually a need of hour”
Any interested invidual, in my opinion, should study their TAM contracts, Green RTM offering and IGX,ICX ,Coal exchange to figure future outlook.
D- not invested
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With the Coal Exchange Rules, 2026 https://coal.gov.in/sites/default/files/2026-06/09-06-2026a-wn.pdf now notified and the application portal officially opened, India has moved from merely discussing coal exchanges to actually implementing them. I think this deserves a deeper discussion from an IEX investor’s perspective rather than assuming it is automatically positive for the company.
A few thoughts and questions:
1. What is the government’s end goal?
This appears to be part of a broader shift towards market-based pricing in the coal sector. Over the past few years, we’ve seen commercial coal mining, liberalised coal sales, amendments to the MMDR Act, and now a regulated framework for coal exchanges.
The Rules themselves clearly state that a Coal Exchange shall be established to formulate coal supply contracts, facilitate transactions in those contracts, enable fair, transparent, neutral and efficient price discovery, disseminate price information, and ensure the efficient and timely supply of coal in accordance with contractual terms.
To me, this suggests the government’s ambition goes beyond simply creating another trading platform. It is trying to build a transparent, market-driven ecosystem for coal trading with standardized contracts and reliable price discovery, much like what electronic power exchanges achieved for electricity over the past two decades.
2. The opportunity is not exclusive to IEX
One important point that many investors seem to be overlooking is that this is going to be a competitive market from Day 1.
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IEX has already received in-principle board approval to explore setting up a coal exchange.
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NSE has received SEBI approval to invest ₹100 crore in the proposed National Coal Exchange of India Ltd. and has stated that it will apply for a Coal Controller licence.
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MCX has also received SEBI approval to invest up to ₹100 crore in a dedicated coal exchange subsidiary.
Unlike electricity, where IEX built a dominant first-mover position over many years, coal could start with multiple well-capitalised and experienced exchange operators competing simultaneously.
3. Physical delivery is the real challenge
Unlike electricity, coal is a PHYSICAL commodity.
An exchange can match buyers and sellers electronically, but someone still has to handle:
- grade standardisation
- quality certification
- mine dispatch
- railway rake allocation
- transportation
- delivery timelines
- dispute resolution
Building the trading platform may actually be the easier part. Building trust in settlement and delivery could determine which exchange ultimately wins liquidity.
4. What products could eventually emerge?
Initially I expect simple delivery-based spot contracts.
But over time, if the ecosystem develops well, could we eventually see:
- standardised contracts by coal grade
- regional delivery contracts
- benchmark coal indices
- forward contracts
- financing products linked to inventories
- and perhaps, much later, financially settled derivatives if regulations permit?
This is similar to how power markets gradually evolved rather than launching every product on Day 1.
5. The biggest question is liquidity
Exchange businesses are usually winner-takes-most businesses.
If buyers and sellers naturally gravitate towards one exchange because it has better liquidity, the leader could become very difficult to displace. On the other hand, if liquidity fragments across multiple exchanges, returns may be lower than many investors currently expect.
Some questions I’d love to hear opinions on:
- Does IEX’s existing relationship with power generators and industrial consumers give it a meaningful advantage, or is coal fundamentally a better fit for MCX as a commodity exchange?
- Will logistics and delivery become the real competitive moat rather than the trading platform itself?
Sources:
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