Mahanadi Coalfields, a Coal India subsidiary, gets SEBI's go-ahead for IPO

SEBI issued its final observations on the draft red herring prospectus (DRHP) on November 4. In the regulator's terminology, receiving an observation means a go-ahead to launch an IPO.

Mahanadi Coalfields Ltd (MCL) had filed its preliminary papers in September.

The proposed initial share sale is solely an offer-for-sale (OFS) component of up to 66,18,36,300 equity shares by its promoter, Coal India Ltd, as per the DRHP.

Since there is no fresh issue component, the company will not get any proceeds from the issue. The money will go to selling shareholders.

"Our company expects that listing of the equity shares will enhance our visibility and brand image and provide liquidity and a public market for the equity shares in India," the firm said in its DRHP.

Half of the net offer is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional investors.

Incorporated in 1992, Mahanadi Coalfields Ltd produced 218.31 million tonnes (MT) of coal in the financial year 2025-26, accounting for about 22.4% of the country's total non-coking coal production, as per the 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 FY26. Coal India accounts for more than 80 per cent 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.

In August, 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.

Coal India's board had in March this year accorded in-principle approval for the divestment of up to 25 per cent equity stake each in SECL and MCL through an offer for sale.

The board had also approved the issuance of fresh equity shares by SECL of up to 10% of its post-issue paid-up capital through the IPO route.

MCL had 17 operational mines as of June 30, 2026, comprising 14 open-cast 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.

The company's shares are proposed to be listed on the BSE and NSE.

SBI Capital Markets, BOB Capital Markets, IDBI Capital Markets & Securities, Axis Capital and IIFL Capital Service Ltd are the issue's book-running lead managers.