Coal India shares rally 5% as Mahanadi Coalfields files IPO papers; CIL to sell 10% stake

Shares of Coal India surged nearly 5% on Wednesday after the state-owned coal miner said its wholly owned subsidiary, Mahanadi Coalfields (MCL), has filed draft IPO papers with the Securities and Exchange Board of India (Sebi).

Cheering the news, Coal India shares rose as much as 4.93% to hit an intraday high of ₹422.35 on the BSE. At the time of reporting, the PSU stock was trading 3.3% higher at ₹415.75, with a market capitalisation of ₹2.56 lakh crore.

Earlier this year, two of Coal India’s listed subsidiaries - Bharat Coking Coal Ltd (BCCL) and Central Mine Planning & Design Institute Ltd (CMPDI) - made their debut on the domestic bourses. BCCL was listed in January 2026 after its ₹1,071-crore IPO, while CMPDI followed in March with a ₹1,842-crore initial public offering.

Both issues were entirely offer-for-sale (OFS) transactions by Coal India, allowing the parent company to monetise part of its holdings while unlocking value in its subsidiaries.

MCL IPO follows BCCL and CMPDI listings

MCL’s proposed IPO marks another significant step in Coal India’s plans to unlock value from its large operating subsidiaries. The coal miner has filed a Draft Red Herring Prospectus (DRHP) with Sebi for an OFS of up to 661.84 million equity shares with a face value of ₹2 each. The entire stake on offer will be sold by Coal India, implying a 10% stake sale in its subsidiary.

Importantly, the issue will not involve any fresh shares from MCL. Consequently, the subsidiary will not receive any proceeds from the IPO, with the entire amount raised accruing to Coal India.

MCL is the largest coal-producing subsidiary of Coal India and one of the country’s most significant coal miners. Based primarily in Odisha, the company operates the Talcher and Ib Valley coalfields. It produced 218.31 million tonnes of coal in FY26, accounting for about 22.4% of India’s total non-coking coal production and roughly 28.4% of Coal India’s overall output.

The company also has a substantial resource base. Its Talcher and Ib Valley coalfields have an estimated 106.76 billion tonnes of coal resources, while audited reserves stood at 9,840.31 million tonnes as of April 1, 2026. At the current production rate, these reserves are estimated to support operations for around 45 years.

Financially, MCL remains one of the key contributors to Coal India’s earnings. In FY26, the subsidiary reported revenue of ₹30,549.6 crore and net profit of ₹10,698.1 crore. Revenue declined 2.6% year-on-year, while profit fell 1.2%. In the June 2026 quarter, revenue rose 6.4% year-on-year to ₹8,033.8 crore, while net profit declined 2% to ₹2,399 crore.

The IPO is part of a broader value-unlocking strategy at Coal India. In December 2025, the company received board approval to initiate IPO processes for MCL and South Eastern Coalfields Ltd (SECL), following the government’s push to list major subsidiaries during FY27.

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