Coal India share price rises as govt approves proposal for Mahanadi Coalfields IPO listing

The stock was trading 0.26% higher at ₹463.40 per share on the National Stock Exchange (NSE) at 9:25 am.

In an exchange filing on NSE, Coal India Ltd said that "DIPAM/MoC has processed a proposal seeking approval of the Alternative Mechanism (AM) for the listing of Mahanadi Coalfields Ltd, based on the approvals accorded by the board of Coal India Ltd (CIL) and the board of MCL. The AM has approved the proposal for disinvestment/listing of MCL."

The listing could involve a fresh issuance of shares and an offer for sale (OFS) component by Coal India.

"CIL may disinvest its stake in MCL through Offer for Sale (OFS) of existing shares as part of the IPO of MCL and subsequently in one or more tranches," the filing said.

The regulatory filing said that Mahanadi Coalfields may also raise capital through fresh issuance of equity shares as part of the IPO and/or through subsequent follow-on public offers (FPOs), qualified institutional placements (QIPs) or other methods allowed by the Securities and Exchange Board of India (SEBI).

"The disinvestment and capital raising may be undertaken simultaneously or separately, in one or more tranches," it added.

The overall disinvestment and capital raising under these mechanisms will be limited to reducing Coal India's shareholding in Mahanadi Coalfields Ltd by up to 25% of MCL's post-transaction paid-up equity capital.

The proposed listing shall remain subject to market conditions and completion of all required statutory and regulatory formalities, the filing said.

Coal India has eight subsidiaries, namely Bharat Coking Coal Ltd (BCCL), Central Mine Planning & Design Institute Ltd (CMPDIL), Eastern Coalfields Ltd, Central Coalfields Ltd, Western Coalfields Ltd, South Eastern Coalfields Ltd (SECL), Northern Coalfields Ltd and MCL.

Bharat Coking Coal and CMPDI are already listed on the stock exchanges. Coal India's board had earlier also given in-principle approval for divesting up to 25% of its equity stake in SECL via an Offer for Sale (OFS), alongside a fresh issuance of up to 10% equity through an initial public offering or other market routes.