MCL files draft IPO papers for 10% stake sale by Coal India

New Delhi: Mahanadi Coalfields Ltd (MCL), the largest coal-producing subsidiary of state-owned Coal India Ltd, has filed preliminary papers with markets regulator Sebi for an initial public offering (IPO) that will see its parent divest a 10 percent stake.

The proposed IPO comprises an Offer for Sale (OFS) of up to 66,18,36,300 equity shares by Coal India, with no fresh issue of shares, according to the draft red herring prospectus (DRHP) dated August 31.

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As the issue is entirely an OFS, MCL will not receive any proceeds from the share sale. The funds raised through the IPO will accrue entirely to Coal India as the selling shareholder.

The proposed listing marks another step in Coal India's strategy of unlocking value from its large subsidiaries through the capital markets and comes after the successful listings of Bharat Coking Coal Ltd (BCCL) and Central Mine Planning & Design Institute Ltd (CMPDI) earlier this year.

Coal India's shares rose 5 percent to an intra-day high of Rs 422.35 on the BSE following the filing.

MCL accounts for over a fifth of India's non-coking coal output

Incorporated in 1992, Odisha-based MCL produced 218.31 million tonnes (MT) of coal in fiscal 2026, accounting for about 22.4 percent of India's total non-coking coal production, according to a CRISIL report cited in the draft papers.

MCL contributed around 28 percent of Coal India's overall coal production in fiscal 2026. Coal India, in turn, accounts for more than 80 percent of India's domestic coal output.

As of June 30, 2026, MCL operated 17 mines, including 14 opencast and three underground mines.

For the quarter ended June 2026, MCL's revenue from operations increased to Rs 8,034 crore from Rs 7,548.3 crore in the corresponding period a year earlier.

However, its net profit declined to Rs 2,399 crore from Rs 2,448.3 crore in the year-ago quarter.

MCL is a wholly-owned subsidiary of Coal India and was accorded Miniratna Category-I status in 2019.

Part of Coal India's subsidiary listing push

Coal India has been pursuing a broader capital-market strategy to unlock value from its subsidiaries. BCCL was listed in January following an OFS of a 10 percent stake, while CMPDI was listed in March after a 15 percent stake sale.

BCCL's IPO received subscription of nearly 147 times, according to Coal India Chairman and Managing Director B Sairam, who had described the listings as an important step towards unlocking the value of subsidiaries and expanding their access to the capital markets.

Sairam said on Monday that the IPOs of MCL and South Eastern Coalfields Ltd (SECL), two of Coal India's largest subsidiaries, would be completed during the current financial year.

He said the precise timelines would depend on market conditions and government directives.

Coal India's board had in March accorded in-principle approval for divesting up to 25 percent stake each in MCL and SECL through the OFS route. It had also approved a fresh issue by SECL of up to 10 percent of its post-issue paid-up capital through the IPO route.

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The MCL IPO, however, currently proposed at a 10 percent OFS, contains no fresh issue component.

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

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