Govt clears proposal for Mahanadi Coalfields listing, Coal India to divest up to 25% stake

The government has approved a proposal to list Mahanadi Coalfields Ltd (MCL) and divest up to 25 per cent of stake through an initial public offering (IPO), state-owned Coal India Ltd said on Friday.

In a filing to BSE, Coal India Ltd said that "DIPAM/MoC has processed a proposal seeking approval of the Alternative Mechanism (AM) for the listing of Mahanadi Coalfields Ltd, based on the approvals accorded by the board of Coal India Ltd (CIL) and the board of MCL. The AM has approved the proposal for disinvestment/listing of MCL.".

The listing would happen through a combination of fresh equity issuance and disinvestment by Coal India through an offer for sale.

"CIL may disinvest its stake in MCL through Offer for Sale (OFS) of existing shares as part of the IPO of MCL and subsequently in one or more tranches," the filing said.

The filing said that MCL may also raise capital through fresh issuance of equity shares as part of the IPO and/or through subsequent follow-on public offers (FPOs), qualified institutional placements (QIPs) or other methods permitted by the Securities and Exchange Board of India (SEBI).

The disinvestment and capital raising could be undertaken simultaneously or separately, and may be executed in one or more tranches, subject to market conditions and regulatory approvals.

The overall extent of disinvestment and capital raising under these mechanisms shall be limited to reducing its shareholding in Mahanadi Coalfields Ltd by up to 25 per cent of MCL's post-transaction paid-up equity capital.

The proposed listing of MCL shall remain subject to prevailing market conditions and completion of all necessary statutory and regulatory formalities, the filing said.

The Prime Minister's Office (PMO) has directed the coal ministry to ensure that all subsidiaries of CIL are listed on stock exchanges by 2030.

The move is aimed at streamlining oversight, enhancing transparency, and unlocking value through asset monetisation.

Coal India, which accounts for over 80 per cent of India's domestic coal production, currently operates through eight subsidiaries: Eastern Coalfields Ltd, Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd, Western Coalfields Ltd, South Eastern Coalfields Ltd (SECL), Northern Coalfields Ltd, MCL, and Central Mine Planning & Design Institute Ltd (CMPDIL).

The Coal India board had earlier given in-principle nod for divesting up to 25 per cent of its equity stake in SECL through Offer for Sale (OFS), alongside a fresh issuance of up to 10 per cent equity through initial public offer or other market routes. Bharat Coking Coal Limited was successfully listed on stock exchanges in January 2026 and Central Mine Planning & Design Institute Ltd was listed on the NSE and BSE on March 30, 2026.