IPO Size: Rs. 1,842 cr, Entirely Offer for Sale (OFS)

• By promoter Coal India (100% to shrink to 85%)

Price band: Rs. 163-172 per share

M cap: Rs. 12,281 cr, implying 15% dilution

IPO Date: Fri 20^th Mar to Tue 24^th Mar 2026, Listing Mon 30^th Mar 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Consultancy Company for Coal and Minerals

Central Mine Planning and Design Institute, a Mini Ratna (Category 1) company and Coal India’s wholly owned subsidiary, has launched a 100% OFS, after Bharat Coking Coal, which was also a wholly owned subsidiary of Coal India. Central Mine Planning provides consultancy services to Ministry of Coal as well as to Coal India, covering entire lifecycle of mining operations, ranging from initial exploration to closure of mines.

Healthy Margins

FY25 revenue was Rs. 2,103 cr with 32% PAT margin on Rs. 667 cr PAT and an EPS of Rs. 9.3. 9MFY26 revenue grew 9% YoY to Rs. 1,490 cr, with 29% PAT margin, on Rs. 425 cr PAT. 9MFY26 EPS grew 9% YoY to Rs. 6, on Rs. 143 cr equity, comprising 71.4 cr outstanding equity shares of Rs 2 each.

Since client are government entities, outstanding receivables are very high, at over 5.5 months. Yet, RoE is ~29%, as business is asset light, with networth of Rs. 2,154 cr, including Rs. 1,215 cr cash and equivalents.

Inline pricing

On FY25 historic basis, shares are priced at a PE multiple of 18.5x, in between consulting PSUs peers Engineers India and Rites Limited trading at 14x and 22x respectively. While Central Mine’s strong margin and healthy return ratio are attractive, business growth depends on Ministry of Coal and linked to Coal India growth.

Revenue of Coal India has been rising over the years, but share is ruling at a PE multiple of only 9x, mainly due to its ‘PSU’ tag’. And this is after share price has risen 21% in the past 3 months!

PSU stocks generally do not enjoy a high valuation multiple and due to uncertainty around government policies, they seldom reward shareholders in the long term. Even Central Mine’s dividend yield is nothing extra-ordinary. Based on 9MFY26 annualized interim dividend of Rs. 1.05, it is 1.2% and is at 2.4%, based on FY25 dividend of Rs. 4.2 per share. It is expected to remain in the 2-2.5% range, based on the payout mandate of higher of 30% PAT or 5% of networth.