Coal India shares rose nearly 4% on Wednesday, emerging as the top gainer on the Nifty 50 even as the broader market fell. The stock touched around ₹420, lifting the state-run miner's market capitalisation to nearly ₹2.6 lakh crore, according to reports from Free Press Journal and Moneycontrol.
The rally followed Coal India's filing of draft documents for the initial public offering of its subsidiary Mahanadi Coalfields. The company plans to sell a 10% stake in the subsidiary through an offer for sale, involving around 66.18 crore shares. Since the issue is entirely an offer for sale, Mahanadi Coalfields will not receive any fresh capital from the IPO.
Mahanadi Coalfields financials and production
Mahanadi Coalfields, which operates primarily in Odisha, is one of Coal India's largest subsidiaries. It accounted for 21% of India's domestic coal production and 28.4% of Coal India's output in FY26, according to Moneycontrol. Free Press Journal reported that Mahanadi contributed nearly 21% of India's coal production and over 28% of Coal India's output.
The subsidiary recorded a net profit of ₹10,678 crore in the year ended March 2026, with revenue of ₹30,550 crore, as per both outlets. Moneycontrol noted that net profit declined around 1.3% from the previous year, while revenue fell 2.6%, figures that Free Press Journal did not include.
Coal India had said in March that it could divest stakes of up to 25% in Mahanadi Coalfields and South Eastern Coalfields through IPOs or other routes, Moneycontrol reported. The company has already listed Bharat Coking Coal and Central Mine Planning & Design Institute this year.
Brokerage views and market context
Brokerages remained optimistic about Coal India's prospects, citing healthy thermal coal demand, lower inventories and improved auction pricing. UBS retained its 'Buy' rating with a target price of ₹550 per share, highlighting a rise in coal offtake and declining stockpiles. The brokerage noted that reduced production levels have helped bring down pithead inventories, supporting higher premiums in e-auctions.
HSBC also maintained a positive view, pointing to strong electricity demand, weak hydro power generation and three-year-low coal inventories. Moneycontrol reported that HSBC retained its 'hold' call with a target price of ₹440, and saw potential upside risk to Coal India's dividend per share.
Coal India's August e-auctions further strengthened the outlook, with the company allocating 82.76 lakh tonnes of coal at a premium of 59% over notified prices, according to Free Press Journal.
The stock's gains came despite the Sensex and Nifty witnessing sharp declines. At 9:45 am, the Nifty 50 was down 215 points, or 0.89%, at 23,840.60, while the Sensex fell nearly 600 points to 76,344.54, Moneycontrol reported. The shares have gained over 4% so far in 2026, compared with an 8.8% decline in the Nifty 50.
The stock's outperformance was particularly stark against the weak market backdrop, reflecting investor confidence in Coal India's operational performance and growth prospects, as per the reports.