Multi Commodity Exchange (MCX) has received approval from the Securities and Exchange Board of India (SEBI) to invest in a proposed coal exchange company. The regulator granted approval on April 17, enabling MCX to proceed with plans to set up a wholly owned subsidiary. The exchange is India's leading commodity bourse and outlined the proposal in a regulatory filing. The development follows the filing and confirms the firm's intent to enter the coal trading space.

MCX said it will incorporate the new firm, likely to be named MCX Coal Exchange Ltd or MCX Coal Exchange of India Ltd, and will initially hold a full equity stake. The filing indicated the subsidiary will be established to operate a specialised platform for coal trading under draft Coal Exchange Rules. The subsidiary is intended to provide a regulated marketplace for standardised coal contracts and to support price transparency. The move is positioned as part of MCX's strategy to broaden its commodities offerings.

The exchange said it will commit capital of up to Rs one billion to meet minimum net worth requirements under the draft rules. The amount converts the originally stated Rs 100 crore into an equivalent figure reported in the filing. The capital commitment is designed to ensure compliance with the draft rules and to establish operational infrastructure for the platform. MCX will hold the entire stake at incorporation while retaining the option to admit strategic partners at a later stage.

Market participants said the new platform will widen price discovery and liquidity for coal contracts once operational, and that details on product design and timelines will be finalised following incorporation. The company will proceed with necessary regulatory steps and internal approvals before commencing trading activities. Timelines were not disclosed in the filing and will be announced subsequently. Observers said the development would intensify competition among existing commodity platforms and provide an institutional avenue for physical coal transactions.