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Mahanadi Coalfields, a wholly-owned subsidiary of Coal India, is getting ready to hit Dalal Street. The company has filed its DRHP with market regulator SEBI for an initial public offering.
But why are Coal India shares rallying?
Coal India shares rallied 4% intraday on heavy volumes, even as the broader market remained weak. The gains came after reports that the world’s largest coal producer plans to sell a 10% stake in Mahanadi Coalfields through the IPO.
Breaking it down: the IPO is entirely an offer for sale, which means Mahanadi Coalfields will not receive any proceeds from the issue. The proceeds will instead go to its parent, Coal India.
Mahanadi Coalfields is a big part of Coal India’s business.
According to a CRISIL report, it was India’s largest coal producer by production in FY26, producing 218.3 million tonnes (MT) of coal and accounting for approximately 22.4% of India’s non-coking coal production.
The company operates primarily in Odisha and accounted for around 21% of India’s domestic coal production and 28.4% of Coal India’s total production in FY26.
Coal India’s listing spree: Mahanadi Coalfields isn’t the first Coal India subsidiary to head to the market.
Bharat Coking Coal, which made its market debut in January, is currently down around 25% from its listing price, while Central Mine Planning & Design Institute has gained around 39% since its March listing.
Big picture: coal remains the backbone of India’s energy mix, contributing more than 55% of the country’s primary commercial energy needs. Coal-fired plants also account for around 72% of India’s total power generation.
And despite India’s push towards cleaner energy, coal demand isn’t disappearing anytime soon. It is expected to reach around 1.5 billion tonnes by 2030, as the fuel continues to provide reliable baseload power and support industries such as steel and cement.
