Bharat Coking Coal IPO - 12 things you must know before subscribing to the issue

The first mainboard IPO of 2026 is set to hit the Street after a blockbuster 2025. Bharat Coking Coal Ltd, a subsidiary of Coal India, will open its ₹1,071 crore public issue for subscription on January 9.

The three-day issue is priced in a band of ₹21 to ₹23 per share, with eligible employees getting a ₹1 discount. Investors can apply for a minimum of one lot of 600 shares and in multiples thereafter.

The IPO is entirely an offer for sale, with Coal India divesting a 10% stake in the company.

1. A dominant player in coking coal: Bharat Coking Coal is India's largest domestic producer of coking coal, with output of 40.5 million tonnes. This accounts for nearly 58.5% of the country's total coking coal production. The company also has close to 8 billion tonnes of reserves, translating into more than 100 years of mine life at current production levels.

2. Production ramp up: BCCL has outlined plans to increase production from about 40 million tonnes currently to 54 million tonnes by FY30. Alongside this, coal washing capacity is expected to almost double from 13.65 million tonnes to about 27 to 28 million tonnes, aided by three new washeries.

3. Strong demand visibility: Management believes demand for coking coal will remain resilient as it is structurally tied to steelmaking. With India's steel capacity projected to nearly double by 2030, the requirement for coking coal is expected to stay strong over the medium to long term.

4. Why revenue fell 17% in H1: Revenue declined sharply in the first half due to exceptionally heavy rainfall that disrupted mining operations and weaker global coking coal prices. The actual impact on volumes was limited to about 1 million tonnes.

5. How BCCL prices its coking coal: The company's pricing is linked to international coal benchmarks. Supplies to steel PSUs under long term MOUs are priced at 62.5% of Australia FOB prices, subject to a defined price band.

6. FY30 revenue guidance: At targeted production of 54 million tonnes, BCCL expects to generate around ₹20,000 crore in revenue by FY29-30, according to management guidance.

7. Margins seen near the bottom

: Management believes operating margins are close to cyclical lows. Improvement is expected as coking coal prices recover, volumes increase, and the share of steel sector sales rises.

8. Strategic shift toward steel customers: Most of the incremental 15 million tonnes of production growth is expected to be directed toward the steel sector. Supplies to steel makers are projected to rise nearly six fold, which should lift realisations and margins. Volumes supplied to the power sector are expected to remain largely stable.

9. No financial hit from Jharia Master Plan: While the Jharia Master Plan involves huge rehabilitation costs, over ₹5,500 crore has already been earmarked by Coal India. BCCL will not bear any financial burden related to the plan.

10. Trade receivables issue resolved: Trade receivables stood elevated at around ₹1,850 crore due to disputes over performance linked incentives. Management says the matter has been resolved and collections are expected within the current financial year.

11. IPO proceeds: The ₹1,071 crore raised through the IPO will accrue entirely to Coal India. The funds will be used to support Coal India's ₹1 lakh crore diversification capex plans and not for dividend payouts. There is no fixed timeline for selling the remaining 15% stake, and future dilution will depend on market conditions.

12. Diversification beyond coking coal: BCCL is also expanding into coal bed methane, which is expected to add about ₹100 crore to the bottom line between FY27 and FY29. Its solar power capacity is set to increase from 50 MW to 210 MW by 2030, in line with net zero targets.