The Multi-Commodity Exchange of India (MCX) has received approval from the Securities and Exchange Board of India (SEBI) to invest in the proposed Coal Exchange company. This marks MCX’s significant commitment to the energy sector
Subsidiary to be incorporated
Following SEBI’s approval on April 17, MCX plans to incorporate a wholly owned subsidiary to house the coal exchange. The entity is likely to be named MCX Coal Exchange or MCX Coal Exchange of India, according to the company’s statement.
MCX will initially hold 100% ownership in the subsidiary, with the option to bring in strategic partners at a later stage.
Rs 100 crore capital commitment
The exchange said it plans to commit up to Rs 100 crore towards the venture. This is aimed at meeting the minimum net worth requirements outlined in the draft Coal Exchange Rules.
The new entity will subsequently apply to the Coal Controller Organisation of India for regulatory approvals as and when the framework is notified.
Platform for physical coal trading
The proposed coal exchange will offer a digital platform for the buying and selling of coal, with an emphasis on physical delivery. As per the exchange filing, this is aimed at creating a more regulated, transparent and technology-driven market platform for buying and selling coal.
At present, coal pricing in India is largely shaped by administrative and bilateral arrangements, with limited market-based benchmarks.
MCX: Expanding energy portfolio
The exchange had also launched electricity futures last year. With coal being a key input for power generation and industrial activity, the new platform could widen MCX’s role across both derivatives and physical commodity markets. MCX, which began operations in 2003, accounted for about 98% of the value of commodity futures traded in India in FY25, according to the company.