Coal India Files DRHP to Sell 10% Stake in SECL via IPO

Coal India Ltd (CIL) has submitted the draft red herring prospectus (DRHP) for the initial public offering (IPO) of its wholly owned subsidiary, South Eastern Coalfields Ltd (SECL). The move involves selling a 10 percent stake in SECL to public investors, marking a significant step in the coal sector's stock market presence.

Currently, Coal India holds all of SECL's paid-up equity capital, which totals 668.06 crore shares. The proposed offer involves the sale of 66.81 crore shares, equal to 10 percent of SECL's equity. If the IPO is fully subscribed, Coal India's ownership in SECL will decrease to 90 percent. The sale will be conducted through an offer for sale (OFS), a mechanism where existing shareholders sell part of their holdings. Proceeds from this transaction will go directly to Coal India, with SECL receiving no funds from the share sale, as stated in the DRHP.

SECL highlighted that listing its shares on the stock exchanges will enhance its visibility and brand recognition, while also providing liquidity and a reliable public market in India. This step is expected to raise SECL's profile among investors and facilitate broader participation in the coal producer's growth story.

The DRHP, dated November 1, was filed with the Securities and Exchange Board of India (SEBI), as well as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Coal India announced the filing through a regulatory statement on Monday.

SECL is a major player in India's coal industry, reporting revenue from operations of ₹32,956.52 crore and a profit after tax (PAT) of ₹4,754.59 crore for the fiscal year 2025-26. Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at ₹7,423.77 crore, reflecting strong operational performance.

During FY26, SECL produced 176.29 million tonnes (mt) of coal, representing 16.94 percent of India’s total coal output. It remains the second-largest coal-producing subsidiary of Coal India and contributed nearly 23 percent of the parent company's total coal production. This output marked a 5.25 percent increase compared to 167.49 mt produced in FY25, the highest growth rate among Coal India’s subsidiaries.

SECL’s mining operations are primarily focused in the Korba coalfield in the state of Chhattisgarh. Its three main opencast mines—Gevra, Dipka, and Kusmunda—produced roughly 126 mt in FY26, accounting for over 71 percent of SECL's total output. These mines have a combined environmental clearance capacity of 172.5 million tonnes per annum (mtpa), underscoring their substantial production capabilities.

The company plans to expand its coal production through multiple strategies. These include developing new mines, increasing the capacity of existing mines, engaging mine developer and operator-led projects, and enhancing coal evacuation infrastructure to improve logistics. As part of Coal India's broader goal to produce one billion tonnes of coal by 2030, SECL is projected to contribute about 245 mt annually by FY30.

As of April 1, 2026, SECL possessed geological coal resources estimated at 47.55 billion tonnes, which account for around 11.5 percent of India’s total coal geological resources. Approximately 11 billion tonnes of these resources have been projectised, meaning they are planned for extraction. The company’s audited coal reserves stand at 4.61 billion tonnes. At the FY26 production rate, these reserves are expected to last approximately 26 years, providing a substantial operational horizon.

This IPO is a notable event for the Indian coal industry and capital markets. It offers investors an opportunity to gain exposure to a key producer with a significant output and earnings base. With SECL’s strong financial and operational metrics, the listing is likely to draw attention from institutional and retail investors alike, contributing to the sector’s ongoing integration with the stock market.