Mahanadi Coalfield IPO: Earning opportunity is coming next week for investors who invest money in stock market. If you are thinking of betting on a strong IPO of a government company, prepare your funds now. Mahanadi Coalfields Limited (MCL), a subsidiary of the country’s leading Maharatna company Coal India Limited, is entering the market with its maiden public issue.
This mega IPO may open for subscription next week. According to market estimates, the entire issue size is around Rs. 9,500 crore is going to happen. This issue will open through the book-building route. Under this, a total of 66.18 crore equity shares will be put up for sale. After the closing of the IPO, the company’s shares will be listed on the National Stock Exchange (NSE) as well as the BSE.
Not a single rupee will go into the company’s account
Usually companies bring IPO to expand their business or pay off debt, but not so in Mahanadi Coalfields. According to the draft red herring prospectus (DRHP) of the company, the issue is coming up fully i.e. 100 per cent under offer for sale (OFS).
No new shares will be issued in this IPO. Parent company Coal India is selling its 10 percent stake in the market. Since this entire issue is OFS, the entire proceeds from the sale of shares will go directly to the account of the promoter i.e. Coal India. Mahanadi Coalfield will not get a single rupee from this IPO. The draft offer document was cleared by market regulator Sebi on November 4, after which the company has accelerated preparations for the launch.
How many shares are reserved for retail investors?
Quotas have already been fixed for various categories of investors in this ₹9,500 crore mega IPO:
- Retail Investors (RII): At least 35 percent of the net offer is reserved for general retail investors.
- Qualified Institutional Buyers (QIBs): A maximum stake of 50 per cent has been fixed in this issue for large institutional buyers.
- Non-Institutional Investors (NIIs): A minimum quota of 15 per cent is reserved for large investors (HNIs) or other non-institutional buyers.
Company’s role in coal production of the country
According to official documents, Mahanadi Coalfield Limited was started in the year 1992. It is one of the most prominent and wholly owned subsidiaries of Coal India Limited. The company mainly operates large-scale coal mining operations in the Talcher and IB Valley coal fields of Odisha. This company has a major contribution in the total coal production of the country. Apart from this, MCL also plays an important role in supplying fuel to thermal power plants across the country. This is the reason why it is considered as the most profitable unit of Coal India.
