Mahanadi Coalfields IPO

Strengths · 7

• 01It produced 218.31 million tonnes of coal in FY2026, about 22.4% of India's non-coking coal output per the CRISIL report cited in the document.
• 02Audited reserves of 9,840.31 million tonnes support about 45 years of production at the FY2026 rate.
• 03Opencast mines gave 99.86% of FY2026 production, and output per manshift rose from 27.24 tonnes in FY2024 to 30.34 tonnes in FY2026.
• 04EBITDA was Rs 16,084.93 crore in FY2026 and PAT margin was 31.56% of total income.
• 05Return on net worth was 53.87% in FY2026 and net cash from operating activities was Rs 12,477.53 crore.
• 06Borrowings are tiny at Rs 2.35 crore as on 31 March 2026, and the current ratio was 2.11.
• 07As a Coal India subsidiary, it relies on the parent for support and technical design services.

Risks · 10

• 01Revenue from operations fell from Rs 31,634.35 crore in FY2024 to Rs 30,549.59 crore in FY2026, and PAT fell from Rs 11,841.55 crore to Rs 10,698.12 crore.
• 02Raw non-coking coal was 97.41% of sale of products in FY2026, so any fall in its demand hits the whole business.
• 03Thermal power customers took 68.62% of sale of products in FY2026, and government-owned power companies gave 44.81% of revenue from operations.
• 04The top 10 customers gave 55.94% of FY2026 revenue and the top 5 gave 41.09%.
• 05Trade receivable days rose from 21.95 in FY2024 to 40.64 in FY2026, which ties up more cash.
• 06The company is a wholly owned subsidiary of Coal India, its executives are seconded from the parent, and other Coal India subsidiaries also mine coal.
• 07Its top 10 contractors were 60.02% of contractual expenses in FY2026, up from 42.62% in FY2024.
• 08Reserve and resource figures are estimates, and some follow Indian Standard Procedure guidelines that differ from international standards.
• 09The whole offer is an offer for sale of up to 66,18,36,300 shares by Coal India, so the company receives no money from it.
• 10There are 47 criminal, 105 tax and 52 regulatory proceedings against the company, with an aggregate amount of Rs 9,084.80 crore.

Mahanadi Coalfields Limited mines non-coking coal in Odisha, in the Talcher and Ib Valley coalfields. It produced 218.31 million tonnes in FY2026, which the document says is the highest in India and about 22.4% of the country's non-coking coal output. Its registered office is at Burla, Sambalpur.

As on 1 April 2026 its audited coal reserves were 9,840.31 million tonnes. At the FY2026 production level, the company says this lasts around 45 years. Opencast mines gave 99.86% of production in FY2026.

The company sells coal only in India. Its customers are power utilities (state, central and private generating companies and captive plants) and non-power users such as the cement and sponge iron sectors. Sales to the thermal power sector were 68.62% of sale of products in FY2026. Raw non-coking coal was 97.41% of sale of products. The company reports no separate business segments.

Mahanadi Coalfields is a wholly owned subsidiary of Coal India Limited. Its executive employees are seconded from Coal India. Year-end manpower was 20,602 in FY2026, down from 21,493 in FY2024. Output per manshift rose from 27.24 tonnes in FY2024 to 30.34 tonnes in FY2026.

In FY2026 it dispatched 210.74 million tonnes of coal and removed overburden of 327.22 in cubic metre terms as the document reports it at a stripping ratio of 1.50. The company plans to expand existing mines, add coal beneficiation and build rail and loading infrastructure. It also lists coal gasification, renewable energy and rare earths as new areas.

The industry

The document cites a CRISIL report. Coal supplies about 70% of India's electricity generation in FY2026. India's total coal resource was about 411.53 billion tonnes on 1 April 2026. Odisha holds 106.76 billion tonnes, the most of any state, followed by Jharkhand at 93.66 billion tonnes and Chhattisgarh at 86.41 billion tonnes. Opencast mining dominates Indian coal output because of higher productivity and lower unit costs.

Customer concentration: Top 5 customers gave 41.09% of FY2026 revenue (41.38% in FY2025) and top 10 customers gave 55.94%.