Bharat Coking Coal IPO opens on January 9: GMP, listing details, price bands & more – all you need to know
Bharat Coking Coal Limited (BCCL), a wholly owned subsidiary of Coal India, is set to launch its initial public offering (IPO) on Friday. The issue is witnessing robust demand in the grey market, with shares trading at a premium of around Rs 11.5, indicating a possible listing price of Rs 34–35 per share against the upper issue price of Rs 23.The Rs 1,071.11 crore IPO is entirely an offer for sale, with Coal India divesting 46.57 crore shares. The company will not receive any proceeds from the issue. The IPO will close on January 13, with allotment expected on January 14 and listing scheduled on the BSE and NSE on January 16.The price band for the issue has been fixed at Rs 21 to Rs 23 per share. Investors can apply in lots of 600 shares, requiring a minimum investment of Rs 13,800 at the upper end of the price band. The structure and pricing of the issue are aimed at attracting both retail and institutional investors.Bharat Coking Coal IPOAs of January 8, the grey market premium (GMP) for the BCCL IPO stood at about Rs 11.5, reflecting a nearly 50 per cent premium over the upper price band. The Grey Market Premium helps gauge market mood but, it’s cannot be termed a certainty indicator of listing.Established in the year 1972, Bharat Coking Coal Limited is involved in the mining of coking coal, non-coking coal, and washer coal. It is a major contributor to the supply of coking coal to the steel and power industries in India and is one of the major subsidiaries of Coal India.As of March 31, 2025, BCCL operates 32 mining units, including 25 opencast mines, three underground mines, and four mixed mines. Its operations are spread across the Jharia coalfields in Jharkhand and Raniganj in West Bengal, covering a total leasehold area of 288.31 square kilometres.The company holds coking coal reserves of around 7,910 million tonnes as of April 1, 2024. In FY25, BCCL accounted for nearly 58.5 per cent of India’s total domestic coking coal production. Coal output has risen steadily from 30.51 million tonnes in FY22 to 40.50 million tonnes in FY25. In FY24, the company produced 39.11 million tonnes of coking coal and 1.99 million tonnes of non-coking coal.On the financial front, BCCL reported revenue of Rs 14,402 crore in FY25, marginally lower than Rs 14,653 crore in FY24. Net profit declined by about 20 per cent to Rs 1,240 crore in FY25 from Rs 1,564 crore a year earlier.Brokerage viewsSBI Securities, in its note, said BCCL is India’s largest domestic producer of coking coal, contributing 58.5 per cent of total output in FY25. The company has estimated reserves of 7.91 billion tonnes and operates 34 mines. At the upper price band of Rs 23, the IPO is valued at an EV/EBITDA multiple of 6.4x on post-issue capital. SBI Securities has recommended subscribing to the issue at the cut-off price.ICICI Direct noted that BCCL’s revenue and profit after tax grew at a compound annual growth rate of 5 per cent and 37 per cent, respectively, between FY23 and FY25. In FY25, the company reported EBITDA margins of 12.7 per cent and a return on capital employed of 18.2 per cent. The IPO is valued at around 5.5x EV/EBITDA and 8.6x price-to-earnings based on FY25 numbers. ICICI Direct has assigned an UNRATED status to the issue.Key risks highlighted include the gradual depletion of coal reserves, high customer concentration—with the top ten customers contributing over 80 per cent of revenues—and the long-term risk of declining coal demand due to the increasing shift towards renewable energy.The IPO is being managed by IDBI Capital Markets & Securities and ICICI Securities as book-running lead managers. KFin Technologies has been appointed as the registrar to the issue.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
