Coal India Shares Jump to 52-Week High After Opening E-Auctions to Neighbours

Shares of state-owned Coal India Limited (CIL) hit a 52-week high on Friday after the company announced that buyers from neighbouring countries such as Bangladesh, Bhutan and Nepal will now be allowed to participate in its online coal auctions.

The decision was approved by CIL on January 1 and came into effect immediately. Earlier, buyers from these countries were required to procure coal through third-party sellers to import from India.

Following the announcement, Coal India shares on the BSE rose as much as 7% to touch a one-year high of ₹429.65. At the close of trade, the stock was up 6.88% at ₹427.90 per share.

To facilitate foreign participation, CIL’s board has tweaked the mechanism of its Single Window Mode Agnostic (SWMA) auctions. The e-auction method, introduced in 2022, was designed to consolidate multiple auction windows into a single common platform.

Earlier, coal was sold through multiple segmented auctions, such as sector-specific auctions, which often resulted in different prices for the same grade of coal. The single platform addressed this issue.

Under the mechanism, all buyers compete through a common e-auction window, allowing the market to discover a uniform and transparent price for coal. The e-auction does not restrict the mode of transportation, rail or road, giving buyers greater flexibility and removing legacy dispatch constraints.

Why open the auction to foreign players

“Opening SWMA e-auctions to foreign buyers reflects CIL’s calibrated approach to market expansion while fully safeguarding domestic coal requirements. This step enhances transparency, competition and global market integration,” a senior company official said, according to Coal India’s exchange filing.

Earlier, access to CIL’s coal for cross-border consumers was limited to domestic coal traders who were permitted to buy and sell coal without end-use restrictions.

All operational and procedural aspects have been incorporated into the updated SWMA scheme. Foreign buyers can register on a one-time basis, participate through digital bidding, make advance electronic payments and export coal through notified logistics channels.

The payment process will be fully transparent and compliant with Foreign Exchange Management Act (FEMA) norms. Buyers from Nepal will be allowed to make payments in either Indian rupees or US dollars, while buyers from Bangladesh and Bhutan will be required to pay in US dollars, with valuation based on the rupee.