The board of Coal India Ltd. (CIL) has taken a significant step towards the listing of its subsidiary, South Eastern Coalfields Ltd. (SECL), marking a potential shift in the state-owned coal giant’s strategic approach to its subsidiaries. The board’s in-principle approval, granted through a circular resolution, comes in response to the Ministry of Coal’s recent directive to expedite the listing of subsidiaries Mahanadi Coalfields Ltd. (MCL) and SECL within the upcoming financial year.
“Accordingly, CIL Board through circular resolution has accorded in-principle approval for listing of South Eastern Coalfields Limited (SECL) and the same shall be communicated to MoC for onward submission to DIPAM (Department of Investment and Public Asset Management),” the company stated in an exchange filing. The proposed listing, however, remains subject to various regulatory approvals, including clearances from the Securities and Exchange Board of India (SEBI) and the completion of any necessary internal restructuring.
The move towards listing SECL could have several implications for the coal sector. Firstly, it may pave the way for greater transparency and accountability in the operations of CIL’s subsidiaries. Listing would require SECL to adhere to stricter disclosure norms, potentially enhancing investor confidence and attracting more investment into the coal sector. Secondly, it could facilitate the infusion of fresh capital, enabling SECL to fund its ambitious projects, such as the adoption of paste fill technology for underground mining.
SECL’s plans to implement paste fill technology, a modern and environmentally friendly mining method, could set a new benchmark for sustainable practices in the Indian coal sector. This technology, which involves filling mined-out voids with a paste made from fly ash, crushed overburden, cement, water, and binding chemicals, can prevent land subsidence and ensure the structural stability of mines. SECL’s Rs 7,040 crore agreement with TMC Mineral Resources Pvt. Ltd. for this technology underscores its commitment to sustainable mining practices.
The potential listing of SECL and MCL could also have broader implications for the Indian coal sector. It could encourage other state-owned coal companies to consider similar moves, leading to a more competitive and dynamic market. Moreover, it could attract more institutional investors, both domestic and foreign, to the coal sector, bringing in much-needed capital and expertise.
However, the path to listing is not without its challenges. The coal sector in India is heavily regulated, and the listing process will require navigating complex regulatory frameworks. Additionally, the sector’s perception as environmentally unfriendly could pose a hurdle in attracting investors. SECL’s adoption of sustainable mining practices could help mitigate this perception, but it remains to be seen how the market will respond.
In the meantime, Coal India’s shares have been performing well, settling 3.6% higher at Rs 400.35 on the BSE, ahead of the announcement. The stock is up 4% on a year-to-date basis, reflecting investor confidence in the company’s strategic decisions.
As the coal sector in India stands at the crossroads of change, the potential listing of SECL and MCL could be a significant step towards a more transparent, accountable, and sustainable future. The coming months will be crucial in determining how these developments will shape the sector’s trajectory.