(Image Source: Mint)
Coal India’s stock jumped 6 percent to hit a 52-week high on January 2, 2026, after announcing it would allow coal buyers from Bangladesh, Bhutan, and Nepal to directly bid in its e-auctions starting January 1. Previously, foreign buyers had to work through domestic coal traders who acted as middlemen. Now they can register and bid on their own.
Shares moved from Rs 400 to Rs 424-426 during the day. Over the past month, Coal India gained 12 percent, and year-to-date returns stand at 8.5 percent.
How the Auction System Works Now
Coal India’s e-auction platform, called Single Window Mode Agnostic (SWMA), was closed to direct foreign participation until now. Domestic coal traders controlled access for foreign buyers. The new setup removes this middleman layer.
Registration and Bidding Process
Foreign buyers must register once to participate. After that, they can:
- Bid online through the digital platform
- Make advanced electronic payments
- Arrange coal exports using approved logistics
- Access coal without paying trader markups
The process is straightforward. Coal India incorporated these operational procedures into the updated SWMA scheme to make it simple for international participants.
Payment Arrangements
How Different Countries Pay
Nepal buyers can pay in Indian rupees or US dollars. Bangladesh and Bhutan buyers must pay in US dollars, with amounts converted to Indian rupees. All transactions follow Foreign Exchange Management Act rules.
The payment flexibility reflects India’s trade ties with these neighbors. Bangladesh and Bhutan both import coal for electricity generation, so they are natural customers for Coal India’s output.
Why Coal India Made This Move
Coal India produces about 70 percent of India’s coal. The company operates eight subsidiaries running mines across the country. Management had talked to coal buyers in neighboring countries to understand what they needed and how to set up auctions they could use.
What This Solves
Opening auctions to foreign buyers serves multiple purposes. It increases bidding competition, which can improve prices through transparent discovery. It taps into global coal markets. It removes middleman costs for foreign buyers. It expands Coal India’s customer base. Most importantly, it helps Coal India sell coal sitting in warehouses that isn’t moving domestically.
Coal India’s Current Problems
Coal India’s off-take fell 5.2 percent year-on-year in December 2025 to 64.9 million tonnes. But production rose 4.6 percent to 75.7 million tonnes. That means the company is making more coal than it can sell domestically. Foreign buyers could absorb the surplus.
Profit Has Fallen Sharply
Net profit dropped 31 percent in the second quarter of FY26 to Rs 4,354 crore from Rs 6,289 crore a year earlier. Revenue fell 3.2 percent. EBITDA fell 22 percent to Rs 6,716 crore. Profit margins shrank to 22.25 percent from 27.63 percent. The company needs to sell more coal and improve margins to fix these numbers.
Market Reaction
MSTC, the company that runs Coal India’s e-auction system, saw shares rise 4 percent on the news. MSTC runs the technical platform that lets people bid online.
Investors clearly believe this move could help Coal India. But the real test is whether Bangladesh, Bhutan, and Nepal actually buy more coal. If they do, Coal India could ship more volume and improve profits. If they don’t, the stock gain today will look like a one-day pop that fades.
