Coal India Limited's board has approved a significant financial guarantee to support its subsidiary's renewable energy expansion. The Maharatna company will provide a 100% corporate guarantee of up to ₹3160 crores to CIL Rajasthan Akshay Urja Limited (CRAUL) for funding capital expenditure on an 875 MW Solar PV Plant project.

Board Approval Details

The Coal India board granted this approval during its recent meeting, as disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The guarantee represents a substantial commitment by the coal mining giant to support clean energy infrastructure development.

Joint Venture Structure

CRAUL operates as a joint venture between Coal India and Rajasthan Rajya Vidhyut Utpadan Nigam Limited (RRVUNL), a Rajasthan State Government company. The equity distribution reflects Coal India's controlling interest in the renewable energy venture.

The transaction is conducted at arm's length, considering Coal India's majority holding of 74% in the joint venture. No other promoter, promoter group, or group company interests are involved in this arrangement.

Financial Impact and Risk Assessment

The guarantee creates a potential liability for Coal India in the event CRAUL defaults on its debt obligations. However, this exposure is capped at ₹3160 crores, providing a defined risk parameter for the parent company. The guarantee will enable CRAUL to secure necessary debt financing for the solar project's capital expenditure requirements.

Strategic Significance

This approval demonstrates Coal India's commitment to diversifying its energy portfolio beyond traditional coal mining operations. The 875 MW solar capacity represents a substantial addition to India's renewable energy infrastructure, aligning with national clean energy objectives while leveraging Coal India's financial strength to support the transition.

Coal India Limited has announced the board approval for closure of its step-down subsidiary MJSJ Coal Limited, marking a significant corporate restructuring move by the Maharatna company. The decision was communicated to stock exchanges on March 23, 2026, under regulatory disclosure requirements.

Board Decision and Regulatory Compliance

The Coal India Limited board accorded approval for the closure of MJSJ Coal Limited during its meeting. MJSJ Coal Limited operates as a subsidiary of Mahanadi Coalfields Limited, making it a step-down subsidiary of Coal India Limited. The company has fulfilled its disclosure obligations under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Closure Details and Timeline

The regulatory filing provides specific details about the closure process and underlying factors:

Reasons for Closure

The company has identified two key factors driving the closure decision. MJSJ Coal Limited was not in operation, indicating the subsidiary had ceased active business activities. Additionally, the cancellation of coal blocks by the Hon'ble Supreme Court has rendered the subsidiary's business model unviable.

Regulatory Approvals Required

The closure process requires approvals from two key government entities. The Ministry of Coal must provide clearance given the sector-specific nature of the business. DIPAM (Department of Investment and Public Asset Management) approval is also necessary, reflecting the government's oversight role in public sector enterprise restructuring.

Corporate Structure Impact

This closure represents a streamlining of Coal India Limited's corporate structure. As a step-down subsidiary through Mahanadi Coalfields Limited, MJSJ Coal Limited's closure will simplify the organizational hierarchy and potentially reduce administrative overhead for the parent company.