MCX shares in spotlight as SEBI approves investment in proposed Coal Exchange; all you need to know

The approval granted under Regulation 38(2) of SECC Regulations enables the domestic commodity exchange to make a capital investment of up to ₹100 crore in the proposed Coal Exchange Company.

Subsequently, the MCX will submit a license application to the Coal Controller Organization of India “as and when prescribed”, according to a regulatory filing dated Saturday.

Initially, MCX will hold a 100% stake in the coal exchange, acquired at a par value of ₹10 per share, and subsequently seek other partners to hold shares in its coal exchange arm.

The yet-to-be-incorporated subsidiary will be named MCX Coal Exchange Ltd, or MCX Coal Exchange of India Ltd., or such other name as may be approved by the Ministry of Corporate Affairs.

With the new coal exchange, MCX aims to further deepen India’s commodity market infrastructure by developing a regulated, technology-driven market for buying and selling coal, it said in a regulatory filing.

The domestic commodity exchange added that through this initiative, it will leverage its leadership in commodity exchange governance, surveillance, and clearing and settlement mechanisms to develop and support a transparent and technology-driven coal ecosystem, as envisioned by the Government of India.

NSE gets SEBI nod to invest in proposed National Coal Exchange

This follows the National Stock Exchange (NSE) receiving approval from the market regulator to invest in the proposed National Coal Exchange of India Ltd.

The approval marks a key regulatory milestone towards setting up a structured market platform for physical coal trading in the country, NSE had said in a statement.

The exchange will soon approach the Coal Controller Organisation to obtain the necessary licence for establishing the coal exchange under the relevant regulatory provisions.

The proposed National Coal Exchange is aimed at facilitating electronic spot trading of coal through standardised contracts, enabling transparent price discovery and defined settlement mechanisms for participants, including producers, consumers, and traders.

The initiative is expected to support the development of a formal, transparent, and efficient market structure for coal transactions, subject to incorporation of the entity and receipt of requisite approvals.

Earlier this week, the NSE received approval from the Ministry of Corporate Affairs (MCA) for the reservation of the name "National Coal Exchange of India Limited," which is only for name approval.

The move follows NSE's board approval in February to set up a wholly owned subsidiary for the initiative, with a proposed initial capital infusion of up to ₹100 crore. NSE plans to hold a 60% stake in the venture, while the remaining 40% will be offered to other shareholders.