IPO-bound CMPDI bets on parent Coal India to power future growth

The organization’s relationship with Coal India should not be seen as a dependency but rather a “symbiotic” partnership that has evolved over the last five decades, said Chaudhari Shivraj Singh, chairman and managing director at CMPDI, told Mint.

“CMPDI has been with Coal India for nearly 50 years and has played a big role in bringing the company to its current scale. All exploration, mine planning and prioritisation of mining activities have been carried out by CMPDI,” Singh said.

Coal India continues to dominate India’s coal output, accounting for about 67% of the country’s production last year, while the remaining 33% came from government, public sector and private companies. With coal demand rising alongside economic growth and electricity consumption, Singh expects this broad share to remain stable even as overall volumes increase.

Coal India has set an ambitious production target of reaching one billion tonnes and eventually 1.5 billion tonnes. “The company produced around 781 million tonnes last year. Achieving these targets will require opening new mines and expanding exploration activities, which in turn ensures a steady pipeline of work for CMPDI,” said Mukesh Agrawal, director-finance, Coal India, in an interview.

“There is no question of the budget shrinking because if production has to increase, more mines will need to be opened. That means more exploration and planning work,” Agarwal said, addressing a risk of overexposure to Coal India for revenue and business.

CMPDI reported a revenue of ₹2,103 crore and a profit of ₹667 crore for FY25, according to the company’s red herring prospectus. Of the total revenue, about 67.1% came from work undertaken for Coal India and its subsidiaries.

Mineral diversification

Beyond coal, CMPDI is also exploring emerging opportunities in critical minerals and rare-earth elements as the country seeks to reduce dependence on imports and strengthen supply chains.

“India is believed to have among the world’s largest reserves of rare earth elements, but large-scale exploration has yet to take place,” said Singh, who believes this creates a major opportunity for exploration companies.

Exploration of mineral blocks typically takes between 18 months and two-and-a-half years, depending on the size of the block. After that, mine development can take another three to four years to reach financial viability, implying a five- to six-year timeline before meaningful production begins, said Asheesh Kumar, director, business development, at Coal India.

The institute is also taking initial steps toward international expansion. CMPDI has secured a project in Mozambique and is exploring opportunities linked to Coal India’s overseas ventures, including a project under discussion in Chile.

While international business currently accounts for a negligible share of revenue, the institute expects overseas consultancy work to account for 5-8% of its revenue over the next five years, Singh said.

CMPDI's IPO price band has been fixed in the range of ₹163 to ₹172 per equity share. It’s an offer for sale for Coal India to sell up to 107.1 million shares. At the upper end of the price band of ₹172 per share, CMPDI could raise about ₹1,842 crore from the stake sale.

Coal India is targeting listing two more subsidiaries in FY27–South Eastern Coalfields Limited and Mahanadi Coalfields Limited, Agarwal said.