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Informist, Tuesday, May 27, 2025

KOLKATA – Coal India Ltd. Tuesday said its mining consultancy arm Central Mine Planning and Design Institute Ltd. has filed the draft red herring prospectus with Securities and Exchange Board of India and bourses, wherein it will sell 71.4 million shares with a face value of INR 2, representing 10% of the holding in its wholly-owned subsidiary.

Central Mine Planning and Design Institute, often referred to as CMPDI, said that the proceeds from the sale will go to Coal India fully. The company, which has around 85% market share and is the single-largest mine and mineral exploration entity in the country, also offers services like mine closure plans and mine designing services. However, geological exploration and resource evaluation services alone account for over 46% of CMPDI's annual revenues.

Additionally, in the past decade, CMPDI has also been focussing on offering infrastructure engineering, environmental management, geomatics, specialised technology services, and management systems, primarily for the coal industry as well as for other minerals. The company is also developing Coal India's in-house e-auction portal and also oversaw the technological overhaul in Coal India and all of its mining subsidiaries a few years back.

Although the company receives around 67% of its annual revenue from Coal India, it has been able to successfully diversify into roping in other mining industry clients over the years. This has made CMPDI less reliant on revenues from Coal India.

During 2024-25 (Apr-Mar), CMPDI's annual revenues grew by over 21% on year to INR 21 billion, and in FY24, revenues jumped by 25% on year over INR 17 billion. The company's net profit increased by 32.5% on year to INR 6.7 billion in FY25, and by 69.6% on year to a little over INR 5 billion in FY24.

CMPDI's improving financial position coincides with its decreasing reliance on its parent company for revenues. During FY23, Coal India and all of the monolith's subsidiary accounted for 83% of CMPDI's revenue which decreased to 80% in FY24, and then fell drastically to 67% in FY25.

Nevertheless, CMPDI's dependence on government owned and operated entities remain. During the last three financial years, government owned entities and agencies accounted for 98-99% of CMPDI's annual revenues.

The global mining consultancy market is projected to experience a significant growth from 2024 to 2031. The mining consulting services are intricately linked to the mining sector, which has experienced a compounded annual growth rate of 3.4% from 2018 to 2023. The Indian mining consultancy sector is projected to witness significant growth, with revenues expected to reach over INR 40 billion by FY30, representing a substantial increase from INR 25.7 billion in FY24, driven by increasing demand, favorable industry dynamics and technological advancements, CMPDI said in the DRHP.

Earlier, Coal India officials had stated that the Maharatna company will offload its stakes partially in its two subsidiaries - CMPDI and Bharat Coking Coal Ltd, and list them on bourses. The latter is focussed solely on mining coking coal which is used by the steel and thermal power sector. CMPDI's DRHP is the first among these two subsidiaries.  

Coal India officials said that the listing of CMPDI will unlock value for the company and its shareholders as it is now becoming less dependent on Coal India for its revenues and the company has the potential to further strengthen its core capabilities.

Tuesday, shares of Coal India closed 0.7% higher at INR 399.95 on the National Stock Exchange.

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Avishek Rakshit

Edited by Akul Nishant Akhoury

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