Coal India Ltd. has officially filed draft papers with SEBI to sell a 10% stake in its wholly-owned subsidiary Mahanadi Coalfields Ltd. through an initial public offering (IPO). According to the latest exchange filing, the state-run company plans to sell up to 661.8 million shares in the unit, with each share having a face value of ₹2. As reported by The Hindu BusinessLine, the draft red herring prospectus was filed with SEBI, BSE and NSE on Wednesday, with the IPO comprising entirely an offer for sale (OFS) and subject to regulatory approvals and market conditions. Coal India shares were trading at ₹419.40 per share, up 16.90 points or 4.20% at around 11:25 AM, with the company maintaining a market capitalisation of ₹2,58,372.39 crore as of September 2. The issue allocation follows standard norms with not more than 50% allocated to qualified institutional buyers, 15% to non-institutional bidders, and 35% to retail individual bidders through the book-building process.
Incorporated in 1992, Odisha-based Mahanadi Coalfields has emerged as the largest coal-producing subsidiary of Coal India, producing 218.31 million tonnes of coal in FY2026, accounting for around 28.4% of India's total non-coking coal production and 28.3% of Coal India's overall coal production. As reported by The Hindu BusinessLine, among Coal India's seven coal-producing subsidiaries, MCL is the largest in terms of output, accounting for 21% of India's total domestic coal production in FY26. The company's coal production increased 5.92% from 206.10 MT in FY2024 to 218.31 MT in FY2026. MCL's principal product is non-coking coal, including washed and beneficiated coal, with its customer base spanning power utilities, captive power plants, independent power producers and non-power industries such as cement and sponge iron manufacturers.
MCL's audited coal reserves stood at 9,840.31 MT as of April 1, 2026, with these reserves supporting mining operations for around 45 years at current production rates. According to the CRISIL Report, the company could potentially extend its operational life by approximately another 100 years if additional resources are converted into reserves and production continues at broadly current levels. As reported by The Hindu BusinessLine, MCL's allocated blocks in the Talcher and Ib Valley coalfields hold an estimated coal resource of approximately 40.34 billion tonnes, representing 9.80% of India's total coal resource as at April 1, 2026. India's total coal resource base is estimated to be 411.53 billion tonnes, of which Talcher and Ib Valley coalfields, Odisha, hold a total estimated coal resource of 106.76 billion tonnes. The company operates 17 mines - 14 opencast and three underground, with opencast operations accounting for more than 99% of coal production.
MCL reported revenue from operations of ₹8,033.7 crore for the quarter ended June 30, 2026, up from ₹7,548.3 crore in the corresponding period a year earlier, according to the latest financial data. However, its net profit declined marginally to ₹2,398.7 crore, compared with ₹2,448.3 crore in the June 2025 quarter. The company has invested heavily in mechanised mining, with approximately 70 surface miners as of June 30, 2026, including owned and contracted machines. As of March 31, 2026, MCL owned 22 surface miners, the largest fleet among Coal India's subsidiaries, out of Coal India's total fleet of 47 surface miners. The company holds approximately 33,508.79 hectares of land and operates 17 mines - 14 opencast and three underground, with railways accounting for 96.86% of first-mile-connectivity-based dispatches and 65.28% of total coal dispatches in FY2026.
MCL will remain a Coal India subsidiary, while the government controls key aspects of coal allocation, distribution and pricing. According to The Economic Times, the company depends on Coal India for technical and human resources and on Central Mine Planning & Design Institute (CMPDI) for mine planning and technical expertise. Any shifts in government policy, Coal India's strategy, coal allocation mechanisms, pricing, royalties or environmental regulations could affect the business operations. The proposed IPO is expected to give public-market investors an opportunity to participate directly in one of India's largest non-coking coal producers, backed by substantial reserves, established mining infrastructure and strong linkages to the power sector. The DRHP filing was managed by SBI Capital Markets Limited, Axis Capital Limited, BOB Capital Markets Limited, IDBI Capital Markets & Securities Limited, IIFL Capital Service Ltd. as book running lead managers, with the equity shares proposed to be listed on the NSE and BSE.
