India’s largest power trader, PTC India, finds itself in a Catch-22 situation.
The country’s top electricity regulator on Wednesday (June 17) rejected a plea by a power exchange — a platform for generators, distribution companies, traders and large consumers to buy and sell electricity — that sought an exemption for PTC India.
Hindustan Power Exchange Ltd (HPX) asked for a three-year transitional exemption for the company to trade on the exchange while it gradually dilutes its stake to meet the regulatory threshold. Under the Central Electricity Regulatory Commission (CERC) (Power Market) Regulations, 2021, a trader-member cannot hold more than 5% equity in the power exchange on which it trades. PTC India currently owns 22.62% of HPX.
This comes as the CERC plans to overhaul India’s power market architecture through market coupling. Under this mechanism, power prices across exchanges would be discovered through a centralised mechanism operated by Grid Controller of India, replacing the current system where each exchange independently determines prices based on its own demand-supply dynamics.
Difficulties for PTC India
The regulatory framework has left PTC in a difficult position. The company cannot trade on the HPX, which it helped create, unless it first dilutes its stake. Yet, selling that stake may prove difficult because HPX has struggled to gain market share and attract sufficient trading volumes.
India currently has three power exchanges regulated by the CERC. The Indian Energy Exchange (IEX) dominates the market with over 80% share, while Power Exchange India Ltd (PXIL) and HPX account for the remainder.
Established in 1999, PTC India is India’s pioneering power trader and accounted for nearly 31.8% of the total bilateral electricity volume transacted through licensed traders in FY25, making the regulatory impasse significant for both the company and HPX.
HPX struggling for market share
In HPX’s submissions before the regulator, the exchange said that it has struggled to gain meaningful market share “due to the dominant position of one of the Power Exchanges”, in an indirect reference to IEX. It contended that allowing PTC India to participate as a trading member would bring liquidity and trading volumes to the platform, benefiting all stakeholders.
This is exactly what the HPX first projected as a business plan when the process of its formation began. In that business plan, the exchange presented three business scenarios that were analysed for market size estimation.
In all three scenarios, it was assumed that PTC would be able to bring business to the exchange platform. Even the conservative scenario in the business plan assumed that HPX would start with only the volume that PTC was trading through other exchanges.
Other investors had invested a large amount in HPX based on this projection, the regulator noted in its order.
However, since the commencement of the exchange in 2022, PTC India has not reduced its stake and continued to trade through the other two power exchanges — IEX and PXIL. In its order, CERC noted that PTC India has not submitted documents showing efforts to dilute its shareholding.
“Therefore, we find no merit in such submissions of the Petitioner, as these are purely commercial considerations,” the regulator said.
PTC India seeks removal of restrictions amid proposed rules
PTC India’s unease with this regulatory restriction prominently featured in its latest submission to the regulator on draft CERC (Power Market) (Second Amendment) Regulations, 2026. It proposed norms on market coupling — a process that seeks to discover a uniform electricity price across exchanges.
In its submission to the regulator on June 5, PTC India argued that the proposed regulations mark a shift from an “exchange-centric” structure towards a more “member-centric” one. Here, market-clearing prices would be determined by the Market Coupling Operator, based on aggregated anonymous bids received across power exchanges.
“Consequently, the role of individual Power Exchanges in price determination undergoes a fundamental change and concerns relating to influence over exchange-level price discovery is materially reduced…” its submission read.
An immediate stake sale by PTC India may not be commercially viable. Finding investors willing to acquire a substantial stake in a relatively late entrant that continues to lag behind its peers in trading volumes could prove challenging, potentially limiting the value it can realise from its investment.
In its submission before the CERC, HPX maintained that divestment of stakes would need to be done gradually to achieve optimal outcomes for all stakeholders. “As the equity is currently unlisted, the universe of interested buyers is expected to be limited. Given the stage of organisational growth and development of the Petitioner, this broader universe may not have an effective interest in buying the equity of a late entrant, volume lagged Power Exchange (HPX). This low interest is reinforced by a neutral to negative sentiment on the Power Exchange itself,” HPX said.
It further said that high market concentration due to the dominant position of one power exchange limits competitive participation and, in turn, dampens investors’ appetite for the new power exchange.
“Consequently, identifying suitable strategic or financial investors for stake divestment requires time and sustained market development,” it said, adding, “For a new Power Exchange like the Petitioner, business traction and liquidity enhancement must precede any meaningful change in shareholding.”
Established in 1999, PTC India is India's pioneering power trader. (Express photo by Vivek Prakash Krishna) 
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