Coal India Dividend ₹10.25 (FY27) — Record Date 4 Nov, Yield & History

Coal India Limited (NSE: COALINDIA | BSE: 533278) has declared a 2nd Interim Dividend of ₹10.25 per share for FY 2026-27 on a face value of ₹10, announced on 29 October 2026 alongside Q2 results. The headline rate is 102.5% of face value, but the real cash return for a buyer at the current price of about ₹389 is only 2.63% for this single Coal India dividend payout. The record date is 4 November 2026 and payment is due on or before 27 November 2026, entirely through electronic modes.

Coal India Limited is the world’s largest coal producer and a Maharatna public-sector enterprise under the Ministry of Coal, incorporated in 1973. It supplies the bulk of India’s thermal coal through nine coal-producing subsidiaries, feeding mainly the power and steel sectors, with additional demand from cement, fertiliser and brick-kiln users. The company runs on fuel-supply agreements plus higher-margin e-auction sales. For dividend investors, the appeal of Coal India is structural: a near-monopoly position, an asset-light balance sheet with large cash reserves, and consistent government-mandated payouts. October 2026 coal production rose 19.3% to 67.2 million tonnes and off-take rose 18.7% to 70.3 MT, pointing to a volume recovery after a soft H1.

The dividend lands in a year of mixed signals. On a consolidated basis, FY26 (year to March 2026) revenue was roughly flat at ₹1,68,400 crore (−0.5%) and net profit fell 12.4% to ₹31,071 crore, the second straight annual decline from the FY24 peak of ₹37,369 crore. The reversal came in Q2 FY27: net profit rose about 57% year-on-year to ₹6,547 crore, but that is measured against an unusually weak Q2 FY26. Revenue climbed 20.9% to ₹44,179 crore and EBITDA rose 28.9% to ₹8,499 crore. Sequentially, though, profit fell 26% from ₹8,850 crore in Q1 FY27 – a reminder that the Coal India dividend is backed by cash, not by runaway earnings growth.

The standout point is that this is the largest single interim dividend in Coal India’s history (₹10.25), yet it arrives in a year where annual profit shrank. The payout is funded from the company’s huge liquidity, not from earnings momentum – cash and bank balances stood at ₹52,574 crore at March 2026, up from ₹34,215 crore a year earlier. A second nuance: do not confuse the 102.5% figure (a face-value calculation) with the actual cash return. At ₹389, ₹10.25 is a real yield of just 2.63% for this instalment. The genuine income story is the trailing yield of about 6.8%, among the highest in the Nifty 50, which is what makes the Coal India dividend yield attractive to income seekers.

Coal India has already paid a ₹5.50 first interim dividend this year, taking FY27 interim dividends to ₹15.75 per share so far, with a final dividend typically following after year-end. The board has not disclosed a full-year target, so any run-rate is an estimate, not a commitment. What underpins the outlook is the cash engine: free cash flow of ₹30,783 crore in FY26 and a near-monopoly volume base. Headwinds include softening e-auction realisations, rising employee and wage costs, and a government divestment agenda – the Centre sold a 2% stake via OFS in June 2026. For the Coal India dividend, high payouts look structurally supported, but the amount will track commodity cycles and cash generation rather than steady growth.

At its board meeting on 29 October 2026, Coal India declared its 2nd Interim Dividend of ₹10.25 per equity share for FY 2026-27, on shares of ₹10 face value, as recommended by the Audit Committee. The record date to determine eligible shareholders is Wednesday, 4 November 2026, with payment to be completed on or before 27 November 2026. Following SEBI (LODR) Fifth Amendment Regulations 2025, Coal India will pay this dividend only through RBI-approved electronic modes – no physical warrants, cheques or demand drafts. Shareholders are advised to keep their KYC updated with their Depository Participant so the dividend reaches their bank account. Each equity share carries one entitlement.

This is where many retail investors get misled. The “102.5% dividend” sounds enormous, but it is simply ₹10.25 divided by the ₹10 face value – it has nothing to do with what you actually earn. The true yield on this payout is ₹10.25 ÷ ₹389 = 2.63% (or 2.61% on the 29 October announcement-date close of ₹393.10). The headline that matters for income is the trailing 12-month Coal India dividend yield of roughly 6.8%, based on about ₹26.40 paid over the last year. That trailing yield is elevated partly because the share price has fallen – the stock is about 18% below its 52-week high of ₹491 – so part of the “high yield” reflects a weak price, not just generosity.

Coal India is a Consistent Payer. It has distributed a dividend every year since listing in 2010 and has never suspended one. Per-share payouts climbed steadily from ₹12-13 in FY19-20 to ₹26.40 in FY26, a long-term growth rate of roughly 9-10% a year. The key caveat is that totals are lumpy, not linear – they rise and fall with commodity cycles rather than growing every single year. There have been no dividend cuts of concern, but FY26’s ₹26.40 was marginally below FY25’s ₹26.50, reflecting the profit dip. For the Coal India dividend history, the pattern is reliability and scale, with the exact rupee amount tied to each year’s coal earnings and cash position.

Operating leverage worked in reverse over the full year. FY26 sales were flat yet operating profit fell from ₹43,102 crore to ₹37,172 crore and margin compressed from about 25% to 22%, as employee and other costs outpaced revenue. The Q2 FY27 picture is better: revenue up 20.9% drove EBITDA up 28.9%, showing positive operating leverage returning on higher volumes. Profitability remains high – ROE of 28.2% and ROCE of 35.0% – well above most large-caps. The watch-point is that reported Q2 profit growth of 57% is flattered by a weak year-ago base, and the sequential 26% decline shows quarter-to-quarter earnings for Coal India stay volatile with coal price and volume swings.

Reported profit is an opinion; cash is a fact – and here the facts are strong. In FY26 Coal India generated operating cash flow of ₹43,215 crore against net profit of ₹31,071 crore, a healthy cash conversion well above 100%. After capex, free cash flow was ₹30,783 crore, nearly double the FY25 figure of ₹15,958 crore. This single ₹10.25 dividend costs about ₹6,317 crore – covered 4.9 times by FY26 free cash flow alone. The full-year dividend run-rate of roughly ₹16,270 crore is covered about 1.9 times by FCF and 2.7 times by operating cash flow. The Coal India dividend is therefore funded by genuine cash generation, not by borrowing or asset sales.

Coal India runs an exceptionally liquid, low-leverage balance sheet – the real backbone of its dividend. At March 2026 it held ₹52,574 crore in cash and bank balances plus ₹10,226 crore in investments, roughly ₹62,800 crore of liquid resources. Against total borrowings of about ₹15,668 crore (September 2026), that leaves a net cash position near ₹47,132 crore. In other words, the company could fund this ₹6,317 crore payout almost ten times over from liquid assets alone. Reserves have risen to over ₹1.21 lakh crore. The one trend to note: borrowings have crept up from ₹6,523 crore (FY24) to ₹15,668 crore as the group invests in diversification, though it remains firmly net-cash.

Four-Test Sustainability Scorecard

• Earnings coverage: TTM EPS ₹54.13 covers this ₹10.25 payout 5.3x – comfortable.
• FCF coverage: FY26 free cash flow covers the full-year dividend ~1.9x – adequate.
• Cash coverage: Liquid resources cover this payout ~9.9x – very strong.
• Debt check: Net cash of ~₹47,132 crore; borrowings rising but small – no stress.

Verdict: the Coal India dividend is Sustainable, backed by cash and comfortable coverage. The only soft spot is that annual earnings are cyclical and have declined for two years, so future payout amounts may fluctuate even if the dividend itself is secure.

The Government of India is the promoter, holding 61.13% (September 2026) after cutting its stake by 2% through an OFS in June 2026. Of the ₹6,317 crore total payout, about ₹3,862 crore flows to the Government and roughly ₹2,455 crore to public and institutional shareholders (FIIs 9.59%, DIIs 23.44%, public 5.73%). Coal India dividends are a meaningful contributor to the Centre’s non-tax revenue, which creates a structural incentive for high payouts – a positive for minority investors, who ride alongside the majority owner. The June OFS slightly reduced the Government’s share of each rupee distributed, modestly raising the proportion flowing to public shareholders compared with a year ago.

Since FY2020-21, dividends are taxable in the investor’s hands at their income-tax slab rate; there is no Dividend Distribution Tax. The company deducts TDS at 10% under Section 194 if total dividends paid to a resident shareholder exceed ₹10,000 in a financial year (the threshold raised from ₹5,000). TDS is 20% if PAN is not provided.

Worked Example – 1,000 Coal India Shares

• Gross dividend: 1,000 × ₹10.25 = ₹10,250
• TDS at 10% (exceeds ₹10,000): ₹1,025 → credited ₹9,225
• Tax at 30% slab on ₹10,250: ₹3,075 (balance ₹2,050 at filing)
• Net dividend after full tax: ₹7,175
• Post-tax yield (on ₹389): ~1.84%

General information only, not tax advice. Lower slabs pay less; consult a tax professional.

• Earnings cyclicality: Full-year profit has declined for two years; e-auction realisations and coal prices directly swing payouts.
• Cost inflation: Wage revisions and employee costs compressed FY26 operating margin from ~25% to ~22%.
• Energy transition: Long-term shift to renewables threatens structural coal demand, a key overhang for Coal India.
• Government overhang: Further OFS or divestment, and policy or pricing intervention as a state enterprise.
• Volume dependence: Monsoon disruption, evacuation and logistics bottlenecks can hit production and off-take.

• E-auction premium & realisation per tonne: the main driver of margin and surplus cash for dividends.
• Coal production and off-take growth: the Oct 2026 rebound (production +19.3%) needs to hold through H2.
• Free cash flow trend: sustaining ₹30,000 crore-plus FCF is what keeps payouts comfortable.
• Full-year dividend total vs FY26’s ₹26.40: a final dividend after year-end completes the FY27 picture.
• Government stake actions & capex: any further OFS and diversification spend (renewables, mining) affecting cash.

Coal India’s 2nd interim dividend of ₹10.25 per share is its largest-ever single interim and reinforces its status as one of India’s premier dividend PSUs, with a trailing yield near 6.8%. The positives are clear: strong cash coverage (~9.9x), robust free cash flow of ₹30,783 crore, a near-₹47,000 crore net-cash balance sheet, and a consistent 15-year payout record. The negatives are equally real: two years of declining annual profit, margin pressure, and an energy-transition overhang. Investors should also separate the eye-catching 102.5% face-value figure from the real 2.63% cash return on this instalment. The Coal India dividend is well-funded and sustainable; the variable is the size of future payouts, which will track coal cash flows, not steady earnings growth.

This article is for informational and educational purposes only and does not constitute investment, legal or tax advice. ShareBazaar Online is not a SEBI-registered investment adviser. It contains no buy, sell or hold recommendation. Dividend details are based on Coal India Limited’s exchange filing dated 29 October 2026; financial, price, shareholding and peer figures are sourced from Screener.in, NSE/BSE, company disclosures and public financial portals, and may change. Market investments carry risk. Computed ratios are estimates based on available data. Please verify all figures independently and consult a qualified financial or tax adviser before making any investment decision.