Mahanadi Coalfields IPO gets government nod; Coal India plans up to 25% stake sale

Coal India Ltd has received approval for the proposed listing of its subsidiary, Mahanadi Coalfields Ltd (MCL), paving the way for a stake sale and fresh equity issuance through an initial public offering (IPO).

The approval has been granted by the Alternative Mechanism after the proposal was cleared by the boards of both Coal India and MCL.

Up to 25 per cent stake dilution planned

As part of the proposed public issue, Coal India plans to dilute up to 25 per cent of its stake in MCL through a combination of an offer for sale (OFS) and a fresh issue of equity shares.

Under the OFS route, Coal India will sell a portion of its existing shareholding in MCL. The company may also undertake further stake sales in subsequent tranches.

At the same time, MCL will issue fresh equity shares to raise capital for operational requirements and future expansion plans.

The company said the combined disinvestment and fresh equity issuance will not exceed 25 per cent of Coal India’s current shareholding in the subsidiary.

Move aimed at unlocking value

The proposed listing is part of Coal India’s broader strategy to unlock value in its subsidiaries and improve operational visibility for investors.

The IPO will provide public market investors an opportunity to participate in the growth of Mahanadi Coalfields, one of the key coal-producing subsidiaries within the Coal India group.

MCL is among Coal India’s major producing subsidiaries and plays an important role in the company’s overall production and supply operations.

Subject to regulatory approvals

Coal India said the proposed listing will be subject to market conditions and necessary statutory and regulatory approvals.

The company added that the disinvestment and capital raising process may be carried out either simultaneously or separately, depending on market conditions and execution requirements.

Further details regarding the size, timing and pricing of the IPO are expected to be announced at a later stage.