South Eastern Coalfields Ltd (SECL), a subsidiary of Coal India Ltd, has started inviting pitches from investment banks to manage its proposed initial public offering (IPO) valued between ₹8,000 crore and ₹10,000 crore, according to livemint.com. The IPO is expected to include a combination of fresh share issuance and an offer for sale by Coal India, which plans to eventually divest up to 25% of its stake in SECL.
The process involves SECL soliciting proposals from bankers to handle the IPO, marking a significant step in the company's public listing plans. This move follows a similar strategy by Coal India with its Mahanadi Coalfields unit. The final selection of bankers will precede the formal launch of the IPO, which aims to raise capital through both new shares and existing stake sales by the parent company, as detailed by livemint.com.
This IPO is part of Coal India's broader strategy to monetize its subsidiaries and unlock value for shareholders. The proposed ₹10,000 crore size places it among the larger public offerings in the coal sector recently. Comparable deals include Coal India's earlier Mahanadi Coalfields IPO, which set a precedent for such divestments. The SECL IPO will contribute to the government's disinvestment targets and is significant for investors tracking energy and mining sector listings.
Coal India Ltd's plan to divest up to 25% of its stake in SECL through this IPO is a concrete step toward partial privatization of the subsidiary. The banker selection process initiated this week is a key milestone, with the IPO expected to proceed once the bankers are appointed and regulatory approvals are secured, according to livemint.com.