The National Stock Exchange (NSE) on Friday announced that its board has approved the incorporation of a wholly owned subsidiary to set up a coal exchange, aiming to bring transparency, efficiency, and standardised price discovery to India’s coal market. The proposed entity will be named either National Coal Exchange, Bharat Coal Exchange, or India Coal Exchange, subject to approval from the Ministry of Corporate Affairs.

NSE will hold a minimum 60% stake in the subsidiary, with the remaining 40% potentially distributed among other shareholders. The exchange plans to infuse up to ₹100 crore to meet the minimum net worth requirement under the Coal Exchange Rules, 2025, notified by the Ministry of Coal.

“The establishment of a coal exchange as a wholly owned subsidiary of NSE is intended to bring transparency, efficiency, and standardised price discovery to India’s coal market, which currently operates through fragmented and largely opaque channels,” NSE said in a release.

It added that the absence of a unified trading platform has led to price inefficiencies, limited access for smaller participants, and the lack of a reliable benchmark for spot prices.

As per the release, the platform will operate in the energy sector, enabling electronic trading of physical coal through standardised contracts, with provisions for physical delivery. In the future, the exchange may also introduce derivative products, subject to regulatory approvals. NSE said the initiative aligns with the government’s push for market-based mechanisms in the coal sector and SEBI’s objective of strengthening commodity market infrastructure.

The release noted that setting up the coal exchange as a separate entity will ensure regulatory clarity, operational independence, and risk containment, while leveraging NSE’s expertise in exchange governance, surveillance, and clearing operations. The move is positioned as a strategic and regulatory step to expand NSE’s footprint in the commodity market, enabling physical delivery and contributing to a more transparent and efficient coal trading ecosystem in India.

The incorporation of the subsidiary will require approval from the Securities and Exchange Board of India (SEBI) under Regulation 38(2) of the SECC Regulations. Following SEBI approval, a licence application will be submitted to the Coal Controller Organisation.

By creating a regulated and technology-driven marketplace, NSE aims to provide a fair, competitive, and accessible trading environment for coal producers and consumers, improving market efficiency and ensuring transparent price discovery.