Coal India's shares experienced a significant surge of approximately 6% on January 2, 2026, following the announcement that foreign coal buyers would be permitted to participate directly in the company's e-auctions. This move signifies a strategic shift for Coal India (CIL), allowing it to integrate further into the global coal market while also aiming to maintain a secure supply for domestic needs.
The decision enables coal consumers from neighboring countries, specifically Bangladesh, Bhutan, and Nepal, to directly bid in Coal India's Single Window Mode Agnostic (SWMA) e-auctions. Previously, these foreign buyers could only access Indian coal through domestic traders, who faced no restrictions on resale. Now, these international buyers can participate on par with domestic consumers, fostering a more transparent and competitive marketplace. According to a senior company official, this reflects Coal India's measured yet forward-thinking strategy, balancing market expansion with the critical need to secure domestic coal supply.
The market has responded positively to this development, demonstrating investor confidence in Coal India's strategy to broaden its customer base and enhance transparency in its auction processes. The company's stock price reached a 52-week high, trading around ₹421.95 after the announcement. This surge made Coal India the top gainer on the Nifty 50 index.
To facilitate the participation of foreign buyers, Coal India's Board has approved revisions to the SWMA auction mechanism. These revisions ensure that all operational and procedural aspects are in place for seamless foreign participation. Key features include a one-time registration process for foreign buyers, digital bidding through the SWMA platform, advance electronic payments required before the auction, and adherence to specified logistics channels for exports. Payment regulations stipulate that buyers from Nepal can make payments in either INR or USD, while those from Bangladesh and Bhutan must transact in USD, with valuation based on INR. These updates also ensure compliance with Foreign Exchange Management Act (FEMA) guidelines.
This liberalization is anticipated to boost the demand for Indian coal, potentially leading to increased offtake and revenue for Coal India. While the company reported a 4% increase in production but a 5% decline in offtake for December, this new policy could potentially reverse these trends. The ability to attract foreign currency, particularly US Dollars (with Nepal also having the option for rupee payments), adds another layer of financial advantage.
