The board of directors of Coal India Limited has granted in-principle approval for the listing of its subsidiary, South Eastern Coalfields Limited, marking a key step in the government’s broader disinvestment and capital markets roadmap for coal sector public sector undertakings.

In a regulatory filing, Coal India said the approval was accorded through a circular resolution of the board and will be communicated to the Ministry of Coal for onward submission to the Department of Investment and Public Asset Management. The move follows guidance issued by the Ministry of Coal last week, advising Coal India to initiate concrete steps towards the listing of its subsidiaries, including Mahanadi Coalfields Limited and South Eastern Coalfields Limited, in the upcoming financial year.

Coal India clarified that the proposed listing of South Eastern Coalfields Limited will be subject to multiple regulatory approvals, including clearances from market regulator Securities and Exchange Board of India, as well as the completion of any internal restructuring, if required. The company did not disclose further details on the timeline or structure of the proposed listing. South Eastern Coalfields Limited operates coal mines primarily across Chhattisgarh and Madhya Pradesh and is headquartered in Bilaspur, Chhattisgarh. It accounts for a significant share of Coal India’s overall coal production, making it one of the PSU’s most important subsidiaries.

The subsidiary is also set to become India’s first coal PSU to adopt paste fill technology for underground coal mining, a move seen as a major step towards more sustainable and environmentally responsible mining practices. Paste filling is an advanced underground mining technique that eliminates the need for surface land acquisition by filling mined-out voids with a specially engineered paste made from fly ash, crushed overburden, cement, water and binding agents, thereby preventing land subsidence and improving long-term mine stability. To operationalise this technology, South Eastern Coalfields Limited signed an agreement worth Rs 70.40 billion with TMC Mineral Resources Pvt Ltd in April.

Mahanadi Coalfields Limited, which was carved out of South Eastern Coalfields Limited in 1992, is headquartered in Sambalpur, Odisha, and operates four joint ventures. The company reported coal production of 193.26 million tonnes in the 2022–23 financial year. Shares of Coal India Limited closed 3.6 per cent higher at Rs 400.35 on the BSE Limited ahead of the announcement, outperforming the broader market. The stock has gained around 4 per cent on a year-to-date basis, while the benchmark Sensex remained largely flat.