The Multi Commodity Exchange of India Limited (MCX) announced that it has obtained approval from the Securities and Exchange Board of India (SEBI) to invest in a proposed coal exchange, marking its entry into this sector. MCX plans to invest up to Rs 100 crore to fulfill the minimum net worth requirements outlined in the draft Coal Exchange Rules, showcasing its commitment to expanding its presence in the energy market and broadening the commodity ecosystem.
With a strong foothold in derivatives contracts for crude oil, natural gas, and the recent introduction of electricity futures, venturing into coal is expected to enhance the comprehensiveness of its energy portfolio. The envisioned platform aims to establish a regulated, transparent, and technology-driven marketplace for coal trading, facilitating efficient price discovery within the domestic market, as stated by MCX.
In line with SEBI’s recent approval, MCX intends to establish a wholly owned subsidiary, likely to be named ‘MCX Coal Exchange Ltd’ or ‘MCX Coal Exchange of India Ltd’. Initially, MCX will hold a 100% stake in this subsidiary, with potential plans to involve strategic partners at a later stage, the exchange disclosed.
The proposed coal exchange will provide a standardized digital platform for the physical delivery of coal at market-driven prices, offering a modern solution for coal trading. The newly formed entity will seek necessary approvals from the Coal Controller Organisation of India as required, according to MCX’s announcement.
Following this development, MCX’s shares saw a 1.38% increase on Monday, trading at Rs 2,895.10 on the BSE, reaching an intraday high. The stock’s performance reflected a 52-week high of Rs 2,903.05 and a 52-week low of Rs 1,120.20 on the exchange.
