Coal India to Sell 10% Stake in Mahanadi Coalfields

en.Wedoany.com Reported - On September 1, Mahanadi Coalfields, a wholly-owned subsidiary of Coal India, filed its draft red herring prospectus (DRHP) for an initial public offering (IPO). The offering will be conducted entirely through an offer for sale (OFS), with Coal India proposing to sell up to 661.8363 million shares of Mahanadi Coalfields, corresponding to approximately a 10% stake. Mahanadi Coalfields will not issue new shares and will not receive any proceeds from the offering. The company's shares are planned to be listed on the National Stock Exchange of India and the Bombay Stock Exchange.

The Coal India board had previously granted prior authorization for the listing of Mahanadi Coalfields. On December 23, 2025, the board approved in principle the listing of Mahanadi Coalfields; on March 23, 2026, it further approved in principle the sale of up to 25% of Mahanadi Coalfields' equity through the IPO or other permitted domestic Indian market routes, in one or more tranches. The plan remains subject to regulatory approvals and is constrained by market conditions and related procedures. The 10% sale ratio set in the draft prospectus is lower than the previously approved 25% ceiling.

Mahanadi Coalfields primarily operates coal assets in the Indian state of Odisha. In fiscal year 2026, the company's coal production reached 218.31 million tonnes, accounting for approximately 21% of India's total domestic coal output and 28.4% of Coal India's total coal production during the same period. Coal India itself accounted for approximately 74% of India's total coal output in fiscal year 2026.

The asset data listed in the draft prospectus includes the Talcher and Ib Valley coalfields, with combined estimated coal resources of approximately 106.76 billion tonnes, of which audited coal reserves stand at approximately 9.84031 billion tonnes. In the draft prospectus, Mahanadi Coalfields stated that, based on the annual production level of 218.31 million tonnes in fiscal year 2026, the aforementioned audited reserves could sustain production for approximately 45 years. The coal produced by the company is primarily non-coking coal of various grades, including washed or coal-beneficiation-treated coal products.

For the fiscal year ended March 31, 2026, Mahanadi Coalfields reported a net profit of approximately INR 106.78 billion, down about 1.3% year-on-year; revenue from operations stood at approximately INR 305.5 billion, down 2.6% year-on-year. For the quarter ended June 2026, the company posted a net profit of INR 23.99 billion, compared with INR 24.483 billion in the same period last year; revenue during the period increased from INR 75.484 billion to INR 80.338 billion, up 6.4% year-on-year.

The IPO is being managed by SBI Capital Markets, Axis Capital, BOB Capital Markets, IDBI Capital Markets & Securities, and IIFL Capital Services as book-running lead managers. Coal India has previously completed the listings of two subsidiaries, Bharat Coking Coal and Central Mine Planning & Design Institute; if Mahanadi Coalfields completes the offering as currently planned, it will become another subsidiary of Coal India to enter the public capital markets.