Coal India subsidiary gets permission for an IPO
What's the story
Coal India Limited, the largest coal producer in the country, has received approval from the Department of Investment and Public Asset Management (DIPAM) for listing its subsidiary Mahanadi Coalfields Limited (MCL). The listing will be done through an IPO structure which involves fresh equity issuance by MCL and an offer for sale (OFS) by Coal India.
Approval details
Approval processed after getting nod from boards
The proposal for MCL's listing was processed by DIPAM and the Ministry of Coal, after getting nod from the boards of both Coal India and MCL. The approval allows Coal India to divest its stake in MCL through an OFS as part of the IPO, either in one go or over multiple tranches.
Capital strategies
MCL can raise capital through fresh issue of equity shares
Along with the stake sale, MCL can also raise capital through a fresh issue of equity shares as part of the IPO. The company can consider follow-on public offers (FPOs), qualified institutional placements (QIPs), or other methods approved by SEBI. The disinvestment and capital raising could happen simultaneously or separately, in one or more tranches, depending on market conditions and regulatory approvals.
Listing mandate
PMO directs coal ministry to ensure CIL subsidiaries are listed
The Prime Minister's Office (PMO) has directed the Coal Ministry to ensure all CIL subsidiaries are listed on stock exchanges by 2030. This step is aimed at streamlining oversight, enhancing transparency, and also unlocking value through asset monetization. Coal India accounts for more than 80% of India's domestic coal production and operates via eight subsidiaries including Eastern Coalfields Ltd, Bharat Coking Coal Ltd (BCCL), and Central Coalfields Ltd among others.