Mahanadi Coalfields files draft papers with SEBI to raise funds via IPO

Mahanadi Coalfields Ltd, a major coal-producing company and subsidiary of Coal India Ltd, has filed draft papers with the market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

The proposed initial share sale is an offer for sale (OFS) of 661,836,300 shares by promoter Coal India Ltd, according to the draft red herring prospectus (DRHP).

Since the issue is only an OFS, it 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 company said in its DRHP.

Mahanadi Coalfields will reserve 50% of the net offer for qualified institutional buyers (QIBs), 35% for retail individual investors (RIIs) and 15% for non-institutional investors (NIIs).

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

Shares of the company will be listed on the National Stock Exchange (NSE) and BSE.

As of April 1 this year, the Talcher and Ib Valley coalfields held a total estimated coal resource of around 106.76 billion tonnes.

The company produces various grades of non-coking coal, including washed/beneficiated coal. It services the power utilised sector, including private power utilities, state power utilities, independent power products and captive power plants, as well as non-power industries, including the sponge iron sector and the cement sector.

Incorporated in 1992, the Miniratna Category I status company was carved out of South Eastern Coalfields Ltd.