Coal India shares continue to surge after the state-owned miner indicated progress on the listing of two of its key subsidiaries. The development follows a government push to unlock value from public sector companies, and while the move is still at an early stage, it has raised fresh questions for investors about what this could mean for Coal India’s business and its stock.
Coal India has received in-principle approval from its board to list Mahanadi Coalfields (MCL) and South Eastern Coalfields (SECL). According to exchange filings, the decision comes after the Ministry of Coal asked the company to take concrete steps to facilitate these listings in the coming financial year.
Coal India set to unlock value
The proposed listings of MCL and SECL are not sudden decisions. As per regulatory filling, the Ministry of Coal advised Coal India in December to begin preparations for listing its subsidiaries as part of the government’s broader divestment roadmap. Acting on this, Coal India’s board granted in-principle approval through circular resolutions.
The company has clarified that both listings will be subject to multiple regulatory clearances. The approvals will be communicated to the Ministry of Coal and then forwarded to the Department of Investment and Public Asset Management, which oversees government stake sales.
Why MCL and SECL matter to Coal India
MCL and SECL are not small, peripheral units. These companies are among Coal India’s largest producing subsidiaries. Moreover, they play a major role in overall coal output.
Talking of these subsidiaries, Mahanadi Coalfields is a Miniratna company. It operates primarily in Odisha and was carved out of SECL in the early 1990s. This company runs multiple coal mining projects and joint ventures linked to power generation and rail logistics. Over the years, MCL has emerged as one of Coal India’s highest production arms.
Now the another subsidiary South Eastern Coalfields operates across Chhattisgarh and Madhya Pradesh. This company is also a major contributor to Coal India’s output. It manages dozens of large coal projects and has substantial approved capacity under development.
Altogether, these two subsidiaries form a crucial part of Coal India’s operational backbone.
What does this means for Coal India shareholders
For Coal India investors, one of the key question might be is that whether these listings will create value or dilute control.
As both subsidiaries are currently fully owned, listing them would mean Coal India selling a portion of its stake to public investors.
At the same time, Coal India is expected to retain majority ownership. This means that the operational control will likely remain with the parent company. Any proceeds from stake sales would go to the government, not Coal India directly, as this is part of the divestment programme.
Financial performance of the company
The listing development comes at a time when Coal India’s recent financial performance has shown some pressure. In the September quarter, the company reported lower revenue and profit compared to the same period last year. Operating margins also narrowed.
Coal India share performance
Share price of Coal India was trading over 2% higher in early trade today, December 24. The stock has gained more than 6% over the past five trading sessions and has delivered a return of around 11% over the last one month. On a year-to-date basis, Coal India’s share price is up nearly 6%.