Coal India Plans Ten Percent Stake
Key Highlights
- Mahanadi Coalfields has filed preliminary IPO papers with Sebi.
- Coal India plans to sell a 10% stake.
- The IPO will be entirely an Offer for Sale.
- Up to 66,18,36,300 shares will be offered.
- MCL will not receive proceeds from the OFS.
- MCL produced 218.31 million tonnes of coal in FY26.
- The company operated 17 mines as of June 2026.
Updated News Article
Mahanadi Coalfields Ltd has filed preliminary papers with market regulator Sebi for an initial public offering through which its parent company Coal India Ltd plans to sell a 10% stake.
According to the draft red herring prospectus dated August 31, the proposed IPO will consist entirely of an offer for sale of up to 66,18,36,300 equity shares by Coal India.
Since the issue contains no fresh share component, Mahanadi Coalfields itself will not receive any funds from the IPO. The entire proceeds from the share sale will accrue to Coal India as the selling shareholder.
The proposed listing is part of Coal India’s broader strategy of unlocking value from its subsidiaries through the capital markets.
Coal India has already taken two of its subsidiaries to the stock market this year. Bharat Coking Coal Ltd was listed in January, while Central Mine Planning & Design Institute Ltd was listed in March.
Coal India Chairman and Managing Director B Sairam recently indicated that the IPOs of South Eastern Coalfields Ltd and Mahanadi Coalfields would be completed during the current financial year, although the exact timing would depend on market conditions and government directions.
Coal India’s board had earlier approved in-principle plans to divest up to 25% of the equity in both MCL and SECL through the offer-for-sale route.
Mahanadi Coalfields is one of the most important subsidiaries of Coal India. Incorporated in 1992, the Odisha-based company produced 218.31 million tonnes of coal during fiscal 2026.
According to information cited in the draft papers, this represented around 22.4% of India’s total non-coking coal production. MCL also accounted for approximately 28% of Coal India’s overall coal production during the year.
Coal India remains the dominant producer in India’s domestic coal sector, accounting for more than 80% of the country’s domestic coal output.
MCL’s proposed listing therefore represents a significant transaction for the country’s primary capital market and could provide investors with direct exposure to one of India’s largest coal-producing businesses.
The company had 17 operational mines as of June 30, 2026, including 14 opencast mines and three underground mines.
For the quarter ended June 2026, MCL reported revenue from operations of Rs 8,034 crore, compared with Rs 7,548.3 crore during the corresponding quarter of the previous year.
Net profit, however, declined slightly to Rs 2,399 crore from Rs 2,448.3 crore in the year-ago period.
MCL was granted Miniratna Category-I status in 2019 and remains a wholly owned subsidiary of Coal India.
The proposed IPO comes at a time when investors are closely watching government-led divestments and listings of large public-sector subsidiaries. Such transactions can help parent companies unlock value while giving investors access to individual businesses within large corporate groups.
The issue is being managed by SBI Capital Markets, Axis Capital, BOB Capital Markets, IDBI Capital Markets & Securities and IIFL Capital Services. KFin Technologies has been appointed as the registrar.
