08-07-2025
MCX to launch India's first Electricity Futures after SEBI approval
The Multi Commodity Exchange of India Ltd. (MCX), India's largest commodity derivatives exchange and the world's leading commodity options exchange (FIA, 2024), is set to launch Electricity Futures Contracts on Thursday, July 10, 2025. The move follows the Securities and Exchange Board of India's (SEBI) recent approval in June 2025 and marks a major step toward deepening India's energy derivatives market.
This new electricity derivative will offer a vital hedging tool to power generators, distribution companies (discoms), large industrial users, and financial market participants. Amid rising electricity demand, volatile fuel prices, and evolving energy market dynamics, MCX sees this launch as timely and essential for risk management and price discovery.
The Electricity Futures Contract will: Be traded in 50 MWh lots
Be quoted in INR per MWh (excluding taxes and levies)
Be available for all 12 calendar months, with trading initially open for the near four months
Be cash settled based on the Volume Weighted Average of the Unconstrained Market Clearing Price (UMCP) in the Day Ahead Market (DAM) at Indian Energy Exchange (IEX)
SEBI's Daily Price Limits (DPL) will apply, starting at 6% and extendable to 9%. Margins are set at a minimum of 10% or volatility-based VaR, whichever is higher. Client-level open positions are capped at 3 lakh MWh or 5% of total market-wide open interest—whichever is higher.
The introduction of electricity futures is expected to bring greater liquidity, transparency, and depth to India's evolving power market, while also offering investors a new avenue for portfolio diversification.
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Aman Shukla is a post-graduate in mass communication . A media enthusiast who has a strong hold on communication ,content writing and copy writing. Aman is currently working as journalist at
