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What is the story about?
Bharat Coking Coal Ltd. (BCCL), a wholly-owned subsidiary of Coal India Ltd., is set to launch the first mainboard initial public offering of 2026. The three-day public issue will open for subscription on Friday, January 9, and close on Tuesday, January 13.
Ahead of the issue opening, the company raised ₹273.13 crore from anchor investors on January 8.
Life Insurance Corporation of India emerged as the largest anchor investor, picking up 3.39 crore equity shares worth ₹78 crore. Nippon Life India Mutual Fund and Bandhan Mutual Fund followed, each acquiring 3.26 crore shares worth ₹75 crore apiece.
What brokerages say
SBI Securities has recommended investors subscribe to the issue at the cut off price. At the upper band of ₹23, the issue is valued at an EV/EBITDA multiple of 6.4x on post issue capital, the brokerage said.
The brokerage said that BCCL is India's largest producer of coking coal, accounting for 58.5% of domestic production in FY25. With estimated reserves of 7.91 billion tonnes and 34 operational mines, the company ranks among the largest coking coal reserve holders in the country.
It added that BCCL has delivered revenue, EBITDA and profit CAGR of 4.6%, 88.1% and 36.6%, respectively, between FY23 and FY25.
ICICI Direct has assigned an unrated view on the IPO. The brokerage said that BCCL's sales and profit have grown at a CAGR of 5% and 37% over FY23-25, with EBITDA margins of 12.7% and return on capital employed at 18.2% in FY25.
Anand Rathi has recommended subscribing to the issue for listing gains, stating that at 8.64x FY25 earnings at the upper band, the valuation appears fair and largely priced in given the company's consistent track record and strong financial metrics.
Mehta Equities has also advised investors to subscribe for listing gains, citing BCCL's dominant position in India's coking coal value chain.
The brokerage said the company's large reserve base in the Jharia coalfields, leadership in washery capacity and robust logistics infrastructure, which together create durable cost advantages and high entry barriers.
It added that Coal India's technical and financial backing positions BCCL well to benefit from structural demand and India's import substitution push.
Issue details and structure
The IPO is entirely an offer for sale, through which parent Coal India will divest a 10% stake. The issue is priced in the range of ₹21 to ₹23 per share, with the company looking to raise ₹1,071 crore by offering 46.57 crore equity shares.
Retail investors can apply for a minimum lot of 600 shares, requiring an investment of ₹13,800 at the upper end of the price band, and in multiples thereafter.
The allocation has been set at 35% for retail investors, 50% for qualified institutional buyers and 10% for non institutional investors.
Shares worth ₹107 crore have been reserved for eligible Coal India shareholders. Investors holding Coal India shares on or before January 1, 2026, will be eligible to apply under the shareholder quota. Eligible employees will also receive a discount of ₹1 per share.
At the upper end of the price band, Bharat Coking Coal is expected to command a post-issue market capitalisation of around ₹10,711 crore.
Post listing, Coal India's stake will fall to 90%, remaining well above the minimum public shareholding requirement.
Grey market signals strong debut
Ahead of the IPO, Bharat Coking Coal shares are commanding a grey market premium of close to 50%, indicating strong listing expectations. While the premium has moderated marginally in recent sessions, it continues to point to healthy debut gains.
Market participants, however, caution that grey market trends are volatile and only reflect unlisted market sentiment.
Key risks to watch
Brokerages flagged risks including potential depletion of coal reserves over the long term, high client concentration with the top 10 customers contributing over 80% of revenues, and the gradual rise in renewable energy adoption, which could impact coal demand in the future.
Business profile and listing timeline
Bharat Coking Coal is India's largest producer of coking coal, accounting for about 58.5% of domestic output in FY25. The company operates primarily in the Jharia coalfield in Jharkhand and the Raniganj coalfield in West Bengal.
IDBI Capital and ICICI Securities are the book running lead managers to the issue.
The basis of allotment is scheduled for January 14, with the stock expected to debut on the exchanges on Friday, January 16.
Ahead of the issue opening, the company raised ₹273.13 crore from anchor investors on January 8.
Life Insurance Corporation of India emerged as the largest anchor investor, picking up 3.39 crore equity shares worth ₹78 crore. Nippon Life India Mutual Fund and Bandhan Mutual Fund followed, each acquiring 3.26 crore shares worth ₹75 crore apiece.
What brokerages say
SBI Securities has recommended investors subscribe to the issue at the cut off price. At the upper band of ₹23, the issue is valued at an EV/EBITDA multiple of 6.4x on post issue capital, the brokerage said.
The brokerage said that BCCL is India's largest producer of coking coal, accounting for 58.5% of domestic production in FY25. With estimated reserves of 7.91 billion tonnes and 34 operational mines, the company ranks among the largest coking coal reserve holders in the country.
It added that BCCL has delivered revenue, EBITDA and profit CAGR of 4.6%, 88.1% and 36.6%, respectively, between FY23 and FY25.
ICICI Direct has assigned an unrated view on the IPO. The brokerage said that BCCL's sales and profit have grown at a CAGR of 5% and 37% over FY23-25, with EBITDA margins of 12.7% and return on capital employed at 18.2% in FY25.
Anand Rathi has recommended subscribing to the issue for listing gains, stating that at 8.64x FY25 earnings at the upper band, the valuation appears fair and largely priced in given the company's consistent track record and strong financial metrics.
Mehta Equities has also advised investors to subscribe for listing gains, citing BCCL's dominant position in India's coking coal value chain.
The brokerage said the company's large reserve base in the Jharia coalfields, leadership in washery capacity and robust logistics infrastructure, which together create durable cost advantages and high entry barriers.
It added that Coal India's technical and financial backing positions BCCL well to benefit from structural demand and India's import substitution push.
Issue details and structure
The IPO is entirely an offer for sale, through which parent Coal India will divest a 10% stake. The issue is priced in the range of ₹21 to ₹23 per share, with the company looking to raise ₹1,071 crore by offering 46.57 crore equity shares.
Retail investors can apply for a minimum lot of 600 shares, requiring an investment of ₹13,800 at the upper end of the price band, and in multiples thereafter.
The allocation has been set at 35% for retail investors, 50% for qualified institutional buyers and 10% for non institutional investors.
Shares worth ₹107 crore have been reserved for eligible Coal India shareholders. Investors holding Coal India shares on or before January 1, 2026, will be eligible to apply under the shareholder quota. Eligible employees will also receive a discount of ₹1 per share.
At the upper end of the price band, Bharat Coking Coal is expected to command a post-issue market capitalisation of around ₹10,711 crore.
Post listing, Coal India's stake will fall to 90%, remaining well above the minimum public shareholding requirement.
Grey market signals strong debut
Ahead of the IPO, Bharat Coking Coal shares are commanding a grey market premium of close to 50%, indicating strong listing expectations. While the premium has moderated marginally in recent sessions, it continues to point to healthy debut gains.
Market participants, however, caution that grey market trends are volatile and only reflect unlisted market sentiment.
Key risks to watch
Brokerages flagged risks including potential depletion of coal reserves over the long term, high client concentration with the top 10 customers contributing over 80% of revenues, and the gradual rise in renewable energy adoption, which could impact coal demand in the future.
Business profile and listing timeline
Bharat Coking Coal is India's largest producer of coking coal, accounting for about 58.5% of domestic output in FY25. The company operates primarily in the Jharia coalfield in Jharkhand and the Raniganj coalfield in West Bengal.
IDBI Capital and ICICI Securities are the book running lead managers to the issue.
The basis of allotment is scheduled for January 14, with the stock expected to debut on the exchanges on Friday, January 16.
