How to create bootable el capitan drive using apple silicon mac mini?

What Mac are you going to use the installer on?

If it is a Mac that shipped with El Capitan, use the internet recovery only requires you format the drive with Disk Utility.

If it is a Mac that shipped with less than El Capitan but more Lion or later, the App Store lets you install it via these directions:

https://support.apple.com/en-us/HT211683

If it is a Mac that shipped with Snow Leopard (pre-July 22, 2011), but after March 10, 2010, that's where it becomes difficult, because then you will need a Mac with 10.6.8 on it to clone over target disc mode, given the license.

https://discussions.apple.com/docs/DOC-250003506 explains in more detail

There is no reason to get the M1 Mac involved. As long as your Mac is El Capitan compatible, it has the capability to get it restored.

If the Mini came with Mac OS X Lion or later (July 2011 or later), use internet recovery on an external hard drive that has no important data on it.

command-option-shift-R

The use DIsk Utility to format HFS Extended GUID Journalled (all the terms may not be there). Just don't do APFS.

Then run the installer to 10.11 from this tip:

https://support.apple.com/en-us/HT211683

Unfortunately you cannot do this on a mac that came preinstalled with an OS newer than El Capitan.

When you download the InstallMacOSX.dmg you open that to get the InstallMacOSX.pkg.

Opening the InstallMacOSX .pkg will open an Installation dialogue which doesn't install the

OS but creates the Install OS X El Capitan.app which you use to create the bootable USB installer.

This can only be done on macs that can actually run El Capitan.

Your new M1 mac can't run El Capitan so therefore will refuse to create the installer app.