MCX Gets Sebi Nod to Set up Coal Exchange Subsidiary

India's leading commodity bourse Multi Commodity Exchange (MCX) said on Monday it has received approval from markets regulator SEBI to invest in a proposed coal exchange company.

MCX, which received the Securities and Exchange Board of India's approval on April 17, plans to incorporate a new wholly owned subsidiary, likely to be named MCX Coal Exchange Ltd or MCX Coal Exchange of India Ltd, according to a regulatory filing.

The exchange said it will commit capital of up to Rs 100 crore to the new subsidiary to meet minimum net worth requirements under draft Coal Exchange Rules, and will initially hold a 100 per cent stake, with the option to bring in strategic partners at a later stage.

The new entity will provide a transparent, standardised digital platform for the physical delivery of coal at market-driven prices, and will submit an application to the Coal Controller Organisation of India once prescribed timelines are in place.

The move builds on MCX's existing energy derivatives business, which includes highly liquid contracts on crude oil and natural gas, and an electricity futures contract launched last year. The addition of coal is seen rounding out the exchange's presence across the energy complex.

The coal exchange is aimed at creating a regulated, technology-driven marketplace that enables efficient price discovery for the fuel, which remains central to India's power generation and industrial sectors.