Mahanadi Coalfields Files IPO Papers With Sebi; Coal India To Sell 10% Stake

Mahanadi Coalfields Ltd (MCL) has filed preliminary papers with markets regulator Sebi for an initial public offering (IPO) through which its promoter Coal India Ltd will sell a 10% stake.

The proposed IPO is entirely an Offer for Sale (OFS) of up to 66,18,36,300 equity shares by Coal India, with no fresh issue component, according to the draft red herring prospectus (DRHP) dated August 31.

Since the issue comprises only an OFS, Odisha-based MCL will not receive any proceeds from the IPO. The entire proceeds from the share sale will accrue to Coal India, the selling shareholder.

The filing comes at a time when activity in the country's primary market is gaining momentum after a relatively muted start to the year.

Reacting to the news, shares of Coal India rose 5% to an intra-day high of ₹422.35 on the BSE.

Incorporated in 1992, MCL produced 218.31 million tonnes (MT) of coal in fiscal 2026, accounting for about 22.4% of country's total non-coking coal production, according to a CRISIL report cited in the draft papers.

MCL is also the largest coal-producing subsidiary of Coal India, contributing 28% of the state-owned miner's total coal production in fiscal 2026. Coal India accounts for more than 80% of India's domestic coal output.

The proposed listing is part of Coal India's broader plan to unlock value from its subsidiaries through the capital markets. Coal India has already listed two subsidiaries this year -- Bharat Coking Coal Ltd (BCCL) in January and Central Mine Planning & Design Institute Ltd (CMPDI) in March.

On Monday, Coal India Chairman and Managing Director B Sairam said the IPOs of two of its largest subsidiaries, South Eastern Coalfields Ltd (SECL) and MCL, will be completed within the current financial year.

Responding to questions from shareholders and stakeholders during an interaction, Sairam said the exact timeline for the IPOs would depend on market conditions and government directives.

Coal India's board had in March this year accorded in-principle approval for divestment of up to 25% equity stake each in SECL and MCL through an offer for sale. The board had also approved issuance of fresh equity shares by SECL of up to 10% of its post-issue paid-up capital through the IPO route.

Earlier, addressing Coal India's 52nd Annual General Meeting, Sairam said BCCL was listed in January following an OFS of a 10% stake, which received subscription of nearly 147 times. CMPDI was listed in March, following a 15% stake sale.

He had described the two listings as an important step towards unlocking value from Coal India's subsidiaries and broadening their access to the capital markets.

MCL had 17 operational mines as of June 30, 2026, comprising 14 opencast and three underground mines.

For the quarter ended June 2026, MCL reported revenue from operations of ₹8,034 crore, up from ₹7,548.3 crore in the year-ago quarter. Its net profit, however, declined to ₹2,399 crore from ₹2,448.3 crore in the corresponding quarter a year earlier.

MCL is a wholly-owned subsidiary of Coal India and was accorded Miniratna Category-I status in 2019.

SBI Capital Markets, Axis Capital, BOB Capital Markets, IDBI Capital Markets & Securities and IIFL Capital Services are the book-running lead managers to the issue, while KFin Technologies is the registrar.