Coal India is likely to come out with the initial public offering for its wholly owned subsidiaries Central Mine Planning and Design Institute (CMPDI) and Bharat Coking Coal Limited (BCCL) in the current fiscal 2025-26, official sources told FE. The company is expected to file the Red Herring Prospectus by May.
The state-owned coal production and mining company will be listing 25% of equity in BCCL and CMPDI each.
“Department of Investment and Public Asset Management (DIPAM) has already given its nod. They have asked to list 25% of equity in CMPDI and BCCL. The documents that are required for listing are complete. Within one year, depending on the market, we will list. We will not offer 25% equity in a single shot. We will first test the waters and maybe do it in two or three tranches because we have to fetch as much money as possible,” the source said.
The discussions about CIL listing its subsidiaries have been making rounds in the market for quite some time.
Back in 2022, the company had said that its board had given an ‘in-principle’ approval to the divestment of 25% of paid-up share capital of BCCL and its subsequent listing on the stock exchanges. However, the subsidiary has so far not been listed.
The company’s chairman and managing director P M Prasad had earlier told FE that CIL has floated the tender enquiries for engagement of the bankers/book running lead managers (BRLMs), for both of these subsidiaries.
Sources said that the valuation process of the companies for listing is yet to be done, noting that while valuation is easier for CMPDI, in case of BCCL, it is essential that the resource and reserves estimate comply with the Joint Ore Reserves Committee Code which is internationally recognised for reporting mineral report and reserves.
BCCL produces the bulk of coking coal mined in the country meeting 50% of the total requirement of this key input for the steel industry. CMPDI, headquartered in Ranchi, is Coal India’s consultancy firm that provides research and support for mineral exploration, mining and infrastructure engineering, among others.
During the financial year 2023-24, BCCL reported an annual profit of Rs 2,091.67 crore against Rs 530.19 crore in FY23, according to data from CIL’s annual report for FY24. CMPDI too reported a profit of Rs 732.84 crore in FY24 compared with Rs 366.95 crore net profit made in FY23.
As per the annual report, BCCL has four underground, 25 opencast mines and three mixed mines. In 2023-24, BCCL produced 41.096 MT of coal with an offtake of 39.19 MT.