New Delhi: Coal India Limited (CIL) has filed the Draft Red Herring Prospectus (DRHP) for the proposed Initial Public Offering (IPO) of its subsidiary Mahanadi Coalfields Limited (MCL). The offering will comprise up to 661,836,300 equity shares, representing around 10% of MCL’s equity capital.
The DRHP, dated September 1, has been filed with the Securities and Exchange Board of India (SEBI), BSE Limited and the National Stock Exchange of India Limited (NSE), according to CIL’s disclosure to the stock exchanges.
MCL IPO to Be Entirely an Offer for Sale
The proposed IPO will be structured completely as an Offer for Sale (OFS). Since Coal India is the sole shareholder of MCL, all the shares offered in the IPO will be existing shares held by CIL.
MCL will not issue any new shares and, therefore, will not receive any proceeds from the offering. The transaction will allow Coal India to monetise part of its holding in the subsidiary.
Key Details of MCL IPO
- Company: Mahanadi Coalfields Limited
- Parent: Coal India Limited
- Shares offered: Up to 661,836,300 equity shares
- Stake: Around 10% of MCL
- Face value: ₹2 per equity share
- Offer type: Entirely Offer for Sale
- Fresh issue by MCL: None
- IPO proceeds to MCL: None
- DRHP date: September 1, 2026
- Filed with: SEBI, BSE and NSE
Read also: Coal India Plans ₹50,000 Crore Investment in Coal Gasification, Critical Minerals and Renewables
Coal India Has Scope to Divest More Stake in MCL
Coal India’s board has approved the divestment of up to 25% stake in MCL, leaving scope for additional stake sales beyond the 10% being offered through the current IPO.
Coal India CMD B. Sairam said on August 31 that the offerings of MCL and South Eastern Coalfields Limited (SECL) are expected to be completed during the current financial year. The timing, however, will depend on market conditions and government directives.
The proposed MCL offering is therefore part of a broader divestment strategy involving CIL’s subsidiaries.
MCL Production Declined 3.05% in FY2025-26
MCL produced 218.31 million tonnes (MT) of coal during 2025-26, compared with 225.17 MT in the previous financial year, marking a decline of 3.05%.
However, the company’s offtake remained broadly stable. MCL recorded offtake of 211.35 MT in 2025-26 against 212.02 MT a year earlier, a decline of only 0.32%.
This indicates that coal dispatches remained relatively steady despite the decline in production.
MCL Accounts for Over 28% of Coal India’s Production
MCL continues to be Coal India’s largest coal-producing subsidiary by a significant margin.
Coal India recorded total coal production of 768.14 MT in FY2025-26, down 1.65% from 781.06 MT in the previous year. Its total offtake stood at 744.88 MT.
According to the DRHP, MCL accounted for:
- 28.4% of Coal India’s total coal production
- 21% of India’s total domestic coal production
- More than 28% of CIL’s overall production based on the reported figures
MCL Net Profit Stood at ₹10,678 Crore
MCL reported a net profit of ₹10,678 crore in FY2025-26, registering a decline of 1.3% compared with the previous year.
Its revenue stood at ₹30,550 crore, down 2.6% year-on-year.
The company has also reported audited reserves of 9,840.31 MT. According to the DRHP, these reserves could support production for around 45 years at current production rates.
MCL Follows BCCL and CMPDIL to Capital Markets
The proposed MCL IPO follows the earlier listings of two other Coal India subsidiaries this year.
Bharat Coking Coal Limited (BCCL) was listed in January, while Central Mine Planning and Design Institute Limited (CMPDIL) entered the market in March.
The two listed subsidiaries have since seen different market movements, with BCCL declining by around 25% and CMPDIL gaining approximately 39%.
South Eastern Coalfields Limited (SECL) is also expected to approach the capital markets after the Coal Ministry granted in-principle approval for the proposed offerings of MCL and SECL in December 2025.
MCL IPO Subject to Approvals and Market Conditions
The proposed offering remains subject to applicable regulatory approvals, prevailing market conditions and other relevant considerations.
With the filing of the DRHP, the MCL IPO has moved another step forward in Coal India’s planned subsidiary divestment programme.
About Coal India
Coal India Limited (CIL) is a Maharatna Central Public Sector Enterprise under the Ministry of Coal and the world’s largest coal-producing company. It operates through multiple coal-producing subsidiaries across India and is also diversifying into areas such as coal gasification, renewable energy and critical minerals.
About Mahanadi Coalfields
Mahanadi Coalfields Limited (MCL) is a wholly owned subsidiary of Coal India and one of India’s largest coal-producing companies. It operates primarily in Odisha and contributes significantly to Coal India’s overall production and domestic coal supply.
Read also: Coal India Records 5.5% Growth in August FY27 Coal Supplies at 60.60 MT, NRS Up 9.6%
