Coal India shares rise 6.5% as company permits direct foreign participation in its e-auction

Coal India shares rise 6% as company permits direct foreign participation in its e-auction

• Coal India permits direct e-auction for buyers from Bangladesh, Bhutan, Nepal.
• Shares of Coal India surged 6 percent after the foreign buyer announcement
• Foreign buyers can now bid digitally and pay via FEMA-compliant channels

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Coal India shares surged 6% on January 2 after the PSU firm permitted direct participation of foreign coal buyers from Bangladesh, Bhutan and Nepal in e-auctions.

"In a first, effective January 1, 2026, Coal India Limited (CIL) has permitted coal consumers located in the neighbouring countries like Bangladesh, Bhutan and Nepal, who wish to import coal from India, to directly participate in the Single Window Mode Agnostic (SWMA) auctions conducted by the company," said the firm in a stock exchange filing.

CIL’s Board has cleared the decks recently for this move, tweaking the scheme’s mechanism in the SWMA auction, it said.

“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” said a senior company official.

At 3 pm on January 2, Coal India shares were trading 6.5% higher Rs 427 apiece. Coal India shares climbed 12% in the last one month. Shares of MSTC rose 4% after the announcement. MSTC functions as a government-owned entity that provides e-commerce and auction services for both government and private sectors.

Under the revised framework, foreign buyers can participate alongside domestic buyers in SWMA auction. Earlier, access to CIL’s coal by coal consumers across the borders was only through domestic coal traders who were allowed to buy and sell coal without any end use restrictions.

All operational and procedural modalities have been incorporated in the updated Scheme. Key provisions for foreign buyers include one-time registration, participation through digital bidding, advance electronic payments and export through notified logistics channels.

Payment process would be transparent as per Foreign Exchange Management Act (FEMA) rules. While buyers from Nepal can make the payments in INR as well as US Dollar, buyers from the other two countries are required to affect their payment in US Dollars, valuation of which would be on INR, the PSU firm added.

Earlier, CIL had dialogues with the prospective coal consumers from abroad to categorise the enabling clauses and gauge their need of coal.

"Tepid domestic coal demand this year has hit coal e-auction premiums for Coal India, so this move to level the playing field for foreign buyers will also help the company boost margins and reverse the trend of posting lower offtake volumes," Rupesh Sankhe, a research analyst with Elara Securities, told Reuters.

India's neighbouring countries were buying coal via traders. In the year through November, India exported about 1.54 million tonnes of coal, mainly to Bangladesh, Nepal and Bhutan, as per data from coal trading firm I-Energy Natural Resources.