Coal India's listing-bound subsidiaries log fall in e-auction premiums

E-auction premiums at Coal India's MCL and SECL declined sharply between FY24 and FY26 despite higher coal volumes being offered, as booking rates weakened at both subsidiaries

The average e-auction premium realised by Coal India’s two major subsidiaries, Mahanadi Coalfields (MCL) and South Eastern Coalfields (SECL), proposed for stock market listing, has declined by as much as two-thirds over the past two financial years.

 

According to its draft red herring prospectus (DRHP), MCL's average premium over the notified price fell to ₹274 per tonne in 2025-26 (FY26) from ₹802 per tonne in FY24, a decline of nearly 66 per cent.

 

Consequently, the incremental revenue generated through premiums over notified prices also fell 60 per cent to ₹728 crore in FY26 from ₹1,833 crore in FY24.

 

MCL and SECL are the largest and second-largest subsidiaries of CIL in terms of coal production, and they sell coal mainly through two routes: fuel supply agreements (FSAs) signed with consumers and competitive e-auction windows. Under FSAs, prices are set by CIL and provide a stable revenue stream to the company, while in e-auctions, prices are determined by demand-supply dynamics, and consumers pay premiums over and above notified prices or the benchmark prices at which bidding starts.

 

Companies selling coal through e-auctions earn incremental revenue or "higher realisation" in the form of premiums paid by buyers.

 

At MCL, the decline in premiums came despite a substantial increase in the quantity of coal offered through e-auctions. The company offered 72.26 million tonnes (mt) in FY26, compared with 28.65 mt in FY24. However, the quantity booked rose only to 26.49 mt from 22.86 mt over the same period. Consequently, the proportion of coal offered that was booked declined from nearly 80 per cent in FY24 to around 37 per cent in FY26.

 

In the DRHP, MCL attributed the moderation in its average sales realisation partly to a change in sales mix, with a higher proportion of coal sold under fuel supply agreements (FSAs) at notified prices and a lower contribution from e-auctions, where buyers pay a premium. MCL’s dispatches under FSAs increased from 177 mt in FY24 to 187 mt in FY26, registering a growth of 5.6 per cent.

 

This comes as the two Coal India subsidiaries prepare for their proposed initial public offerings (IPOs), through which the parent company plans to dilute part of its stake.

 

The fall in e-auction premiums is also visible in SECL. For the company, the average premium declined by around 31 per cent, from ₹911.61 per tonne in FY24 to ₹631.94 per tonne in FY26.

 

The quantity offered through e-auctions increased from 30 mt in FY24 to 49 mt in FY26, while the quantity booked rose from 26 mt to 29 mt. The booking rate, however, declined from around 86 per cent to 59 per cent.

 

“Although booked quantities increased significantly during Fiscal 2026, the average premium over notified price moderated relative to earlier years, resulting in lower incremental revenue per tonne,” SECL said in its DRHP. “This indicates normalisation of e-auction premiums despite increasing auction participation.”