Coal India's two major subsidiaries preparing for IPOs have experienced a dramatic decline in e-auction premiums over the past two financial years. According to their draft red herring prospectus (DRHP), Mahanadi Coalfields's average premium over notified price fell to ₹274 per tonne in FY26 from ₹802 per tonne in FY24, representing a 66% decline. Consequently, the incremental revenue generated through premiums over notified prices also fell 60% to ₹728 crore in FY26 from ₹1,833 crore in FY24. Similarly, South Eastern Coalfields saw its average premium decline by 31% from ₹911.61 per tonne in FY24 to ₹631.94 per tonne in FY26. As per Business Standard, this decline in premiums comes despite higher coal volumes being offered through e-auctions, with booking rates weakening at both subsidiaries.
India's capital markets regulator has approved state-run miner Coal India's unit South Eastern Coalfields's IPO, in what is expected to be one of India's biggest offerings this year. The offering will consist entirely of shares sold by parent Coal India, with 66.81 crore equity shares priced at ₹2 each. The IPO could raise as much as $800 million, as reported by Bloomberg, citing people familiar with the matter. The DRHP was filed with the Securities and Exchange Board of India (Sebi), BSE and the National Stock Exchange (NSE) on November 1, 2026. Since the issue is entirely an offer for sale (OFS), Coal India will receive the proceeds while South Eastern Coalfields will not receive any funds from the offering.
At Mahanadi Coalfields, the decline in premiums came despite a substantial increase in e-auction volumes. The company offered 72.26 million tonnes in FY26 compared with 28.65 mt in FY24, but the proportion of coal booked declined from nearly 80% in FY24 to around 37% in FY26. The quantity booked rose only to 26.49 mt from 22.86 mt over the same period. According to the DRHP, MCL attributed the moderation in average sales realisation partly to a change in sales mix, with a higher proportion of coal sold under fuel supply agreements (FSAs) at notified prices and a lower contribution from e-auctions where buyers pay premiums. MCL's dispatches under FSAs increased from 177 mt in FY24 to 187 mt in FY26, registering a growth of 5.6%.
At South Eastern Coalfields, the fall in e-auction premiums is also visible despite increased participation. The company offered 49 mt through e-auctions in FY26 compared with 30 mt in FY24, while the quantity booked rose from 26 mt to 29 mt. However, the booking rate declined from around 86% to 59%. As per Business Standard, SECL attributed the moderation in average sales realisation to normalisation of e-auction premiums despite increasing auction participation. The company reported revenue of about ₹33,000 crore for the fiscal year ended March 31, 2026, with net income of ₹4,755 crore. For the six months ended September 30, 2026, revenue from operations increased to ₹16,593.7 crore from ₹15,090.2 crore in the corresponding period last year, while net profit nearly doubled to ₹2,174.3 crore from ₹1,140.9 crore.
The proposed IPO represents a strategic move by Coal India to divest a 10% stake in South Eastern Coalfields, reducing its holding from 100% to 90%. As per The Financial Express, the company's equity shares are proposed to be listed on both the BSE and NSE. SBI Capital Markets Limited, ICICI Securities Limited, IDBI Capital Markets & Securities Limited and Motilal Oswal Investment Advisors Limited are serving as the book-running lead managers, with KFin Technologies Limited appointed as the registrar to the issue. SECL expects that the listing will enhance its visibility and brand image, provide liquidity and a public market for the equity shares in India. The fall in e-auction premiums comes as both subsidiaries prepare for their proposed initial public offerings through which the parent company plans to dilute part of its stake.
Under Coal India's revised roadmap for producing one billion tonnes of coal, SECL is expected to contribute 245 mt in FY30. The company has outlined plans to increase production through new mine development, capacity expansion, mine developer and operator-led projects, and improvements in coal evacuation infrastructure. The proposed listing is part of Coal India's broader plan to unlock value from its subsidiaries by bringing them to the stock market. In December 2025, Coal India's board granted in-principle approval for the proposed listings of SECL and Mahanadi Coalfields Ltd., following a directive from the Ministry of Coal to initiate concrete steps towards taking the two subsidiaries public. In an office memorandum dated December 16, 2025, the Ministry of Coal had asked Coal India to take necessary steps towards listing SECL and MCL in the following financial year. The proposed SECL listing follows similar moves by other Coal India subsidiaries, with Mahanadi Coalfields Ltd filing preliminary papers in September and Bharat Coking Coal Ltd launching its maiden public offering earlier this year.
