MCL receives SEBI nod to float IPO; Coal India to sell 10% stake

New Delhi: Odisha-based Mahanadi Coalfields Ltd (MCL) has secured capital markets regulator SEBI's clearance to raise funds through an initial public offering (IPO), sources familiar with the development said on Thursday.

SEBI issued its final observations on the draft offer documents on November 4.

The regulator's observation is a key step in the initial public offering (IPO) process, after which a company can proceed with further preparations for the public issue, subject to applicable regulatory requirements.

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MCL had filed its draft red herring prospectus (DRHP) in September with the Securities and Exchange Board of India (SEBI).

The initial public offering is entirely an offer-for-sale (OFS) of up to 66,18,36,300 equity shares by its promoter, Coal India Ltd, as per the draft papers. Since this is an OFS, MCL will not receive any proceeds from the public issue and the entire proceeds will accrue to Coal India, the selling shareholder.

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

MCL is also the largest coal-producing subsidiary of Coal India, contributing 28 percent of the state-owned miner's total coal production in fiscal 2026. Coal India accounts for more than 80 percent of India's domestic coal output.

The proposed listing is part of Coal India's broader plan to unlock value from its subsidiaries through the capital markets.

Coal India has already listed two subsidiaries this year -- Bharat Coking Coal Ltd (BCCL) in January and Central Mine Planning & Design Institute Ltd (CMPDI) in March.

In August, Coal India Chairman and Managing Director B Sairam said the IPOs of two of its largest subsidiaries, South Eastern Coalfields Ltd (SECL) and MCL, will be completed within the current financial year.

Coal India's board had in March this year accorded in-principle approval for divestment of up to 25 percent equity stake each in SECL and MCL through an offer for sale.

The board had also approved issuance of fresh equity shares by SECL of up to 10 percent of its post-issue paid-up capital through the IPO route.

MCL had 17 operational mines as of June 30, 2026, comprising 14 opencast and three underground mines.

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For the quarter ended June 2026, MCL reported revenue from operations of Rs 8,034 crore, up from Rs 7,548.3 crore in the year-ago quarter.

Its net profit, however, declined to Rs 2,399 crore from Rs 2,448.3 crore in the corresponding quarter a year earlier.

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

The company's shares are proposed to be listed on the BSE and NSE.

SBI Capital Markets, Axis Capital, BOB Capital Markets, IDBI Capital Markets &Securities and IIFL Capital Service Ltd are the book-running lead manager for the IPO.

Meanwhile, South Eastern Coalfields Ltd (SECL), an arm of Coal India Ltd, has filed preliminary papers with markets regulator Sebi for its public issue on November 1.

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