Bharat Coking CoalImage Credit source: AI
In the year 2025, Ranveer Singh’s film Dhurdhan created a stir in Bollywood. There was a lot of discussion about the film. This year also the market has started like a bang. Because a company of the Government of India entered the market and as soon as it entered the market it created a stir. This is happening about Bharat Coking Coal. Bharat Coking Coal’s Rs 1,071 crore IPO opened on Friday with an overwhelming response from investors and was fully subscribed within 30 minutes of its launch. By 10:30 am, this issue was filled 1.12 times, that is, bids had come for 38.9 crore shares as against 34.69 crore shares.
The most interest was shown by non-institutional investors (HNI) and retail investors. HNI category was subscribed 1.99 times and retail category 1.5 times. The shareholder quota of 4.65 crore shares was filled 1.29 times, while Qualified Institutional Buyers (QIBs) bid only 0.01 times so far.
Bharat Coking Coal IPO has also received good response in the gray market. In the informal market, this IPO is trading with about 50% premium on its issue price, which is expected to make good profits on the day of listing. However, the gray market premium only reflects market sentiment and can fluctuate depending on market conditions.
Bharat Coking Coal IPO
The IPO will close on January 13. The total size of the issue is about Rs 1,071 crore and is entirely a share sale (OFS) by Coal India. The price band has been fixed at Rs 21-23 per share. The face value of the share is Rs 10 and the minimum application is 600 shares. The shares of the company are proposed to be listed on both NSE and BSE.
Coking Coal Company of India
Bharat Coking Coal is the largest producer of coking coal in the country. This is the largest and important source of prime coking coal in India, which is used in making steel. As of April 2024, the company had reserves of about 7.91 billion tonnes of coking coal, which is about 21.5% of India’s total coking coal resources. In FY25, the company’s share in India’s total domestic coking coal production stood at about 58.5%, which clearly shows its importance in the steel sector.
The company operates a total of 34 mines in the Jharia coal fields of Jharkhand and Raniganj coal fields of West Bengal. Due to the presence of mines near steel plants and the already existing transport system, the sale of coal remains constant. At the same time, the purpose of investment being made in coal washery is to supply cleaned coking coal of better quality. Bharat Coking Coal is a wholly owned subsidiary of Coal India, the world’s largest coal producing company. It benefits from Coal India’s technical know-how, financial strength and large-scale operations.
Issue structure and valuation
This IPO is completely an offer for sale of Rs 1,071 crore, which means the company will not get any new money from it. After listing, Coal India’s stake will come down to around 90%. The issue price is Rs 21-23 per share and the minimum lot is 600 shares. According to brokerage estimates, the company’s valuation at the upper price band works out to be around 8.6 times FY25 earnings.
Talking about financial performance, in FY25, Bharat Coking Coal recorded a revenue of about Rs 13,803 million and a profit of Rs 1,564 million. Although profit margins have fluctuated due to changes in costs and prices, the company remains a debt-free and cash-earning business.
Should you subscribe?
In ET report, Anand Rathi Research has given subscribe rating to this IPO mainly for listing gains. The brokerage has cited the company’s strong market position, large coal reserves and important role in the steel sector as its strengths. However, he says valuations at the upper price band are fair, but most of the good news is already factored into the price. Therefore, the possibility of rapid increase in share prices in the long run may be limited. Experts consider this IPO as a short-term opportunity rather than a long-term investment story. Shortage of coking coal and positive environment regarding PSU disinvestment can support good profits on the listing day.
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