Coal India shares rise over 3%; here is why the stock is buzzing

Shares of Coal India gained over 3.5% on Tuesday, May 20, after the PSU firm shared plans to list two subsidiaries.

The process of listing two subsidiaries of Coal India Ltd—BCCL and CMPDI—has begun, and draft papers will be filed soon with Sebi, the company had said on Monday.

Speaking to reporters on the sidelines of the CII Mining and Construction Equipment Summit, Coal India Ltd (CIL) Director of Business Development Debasish Nanda said, "We are going to file DRHP soon. We are working on that."

DRHP is a preliminary document that a company files with market regulator Sebi for a public offer.

Following this, Coal India shares jumped 3.34% on the National Stock Exchange to ₹416.15 apiece on Tuesday. From its previous close, the stock has gained 3.6%.

Nanda further said that the Book Running Lead Manager (BRLM) for the IPO has just been appointed.

The coal ministry had earlier said the listing of both firms—Bharat Coking Coal Ltd (BCCL) and Central Mine Planning and Design Institute (CMPDI)—will take place, but the timing will depend on market conditions.

Coal India has seven coal-producing subsidiaries and one technical and consultancy company. The firm accounts for over 80% of the domestic coal production.

The company, Nanda said, is working on critical minerals both in India and abroad and added that "with regard to critical mineral projects overseas, we are looking at South America, Australia and Africa." He, however, did not divulge the names of the companies.

State-owned Coal India reported a 12% increase in its consolidated net profit at ₹9604.02 crore for the fourth quarter of the financial year 2024-25. Its profit for the same quarter last fiscal year was at ₹8,572.14 crore.

The company’s revenue from operations for Q4 FY25, however, marginally declined by a percent to ₹37,824.54 crore as against ₹38,213.48 crore reported in the corresponding quarter last fiscal year.

Coal India’s earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 4% to ₹11,790.15 crore for Q4 FY25 as compared to ₹11,387.59 crore in Q4 FY24.

The margin for the quarter under review was at 31.2% in contrast to 29.8% year on year (YoY).

The company’s board has recommended a final dividend for FY25 at ₹5.15 per share of the face value of ₹10.

In the financial year 2024-25, CIL produced 781.1 mt of coal, nearly 7% less than the company's target for the financial year. Coal India Ltd is targeting a production of 875 million tonnes and an offtake of 900 mt in the 2025-26 fiscal year.