Why Are Coal India Shares Surging?

Coal India Limited (CIL) witnessed a significant uptick in investor sentiment during Wednesday's trading session, with share prices climbing nearly 3 per cent. On December 24, 2025, the stock reached a seven-month peak of Rs 412.40 during early trades, marking the sixth consecutive day of gains for the Maharatna mining giant. This rally comes on the back of heavy trading volumes on the National Stock Exchange (NSE) and major announcements regarding the company’s structural future.

Strategic Approval for SECL and MCL Listings

The primary catalyst for this upward momentum is the Coal India Board’s decision to grant in-principle approval for the listing of two of its most productive subsidiaries: South Eastern Coalfields Limited (SECL) and Mahanadi Coalfields Limited (MCL).

The decision follows an Office Memorandum from the Ministry of Coal issued on December 16, 2025. The Ministry advised CIL to take "concrete measures" to prepare these key subsidiaries for public listings. The board's approval, finalised via a circular resolution, will now be forwarded to the Ministry and the Department of Investment and Public Asset Management (DIPAM) for further action.

The Road to FY27

While the market reacted with enthusiasm, Coal India has maintained a cautious stance regarding the timeline. In a regulatory disclosure made on December 23, the company clarified that these listing plans are still in the preliminary stages. Moving from an in-principle approval to an actual Initial Public Offering (IPO) will require a series of statutory and regulatory clearances. The Ministry of Coal is specifically targeting FY27 for these listings.

Understanding the Scale of the Subsidiaries

Investors are particularly keen on these entities due to their massive operational scale:

• Mahanadi Coalfields Limited (MCL): Headquartered in Sambalpur, Odisha, MCL is currently CIL's largest contributor. In FY25, it achieved a record coal production of 225.2 million tonnes, accounting for nearly 29 per cent of Coal India’s total output and roughly 28.8 per cent of its consolidated profit after tax (PAT).
• South Eastern Coalfields Limited (SECL): A "Mini Ratna" enterprise operating across Chhattisgarh and Madhya Pradesh, SECL reported production of 16.75 crore tonnes in FY25. It manages a robust pipeline of 73 major projects with a sanctioned capital outlay of ₹44,571 crore.

Market Performance and Outlook

The stock's ability to hold its gains—trading between a low of Rs 403.20 and a high of Rs 412.40—reflects strong confidence in the monetisation plan. Beyond SECL and MCL, market reports suggest that Bharat Coking Coal Limited (BCCL) is also on the path toward an IPO, having already filed draft papers with SEBI.

Coal India's recent performance has been stellar, with a 7 per cent gain over the last week and a staggering 187 per cent surge over the past five years. As the company aligns with the government’s "Atmanirbhar" energy goals and targets 1 billion tonnes of production by 2028-29, these subsidiary listings are expected to provide the financial transparency and capital required for such ambitious growth.

Disclaimer: The article is for informational purposes only and not investment advice.